Regulatory Sandboxes : When Public Law Meets Regulatory Theory

Regulatory sandboxes, controlled regulatory environments for the testing of novel products or processes, have garnered an increasing amount of attention over the last decade and have been recently presented as innovation-friendly instruments. This article contends that fostering responsible innovation through regulatory sandboxes presents significant challenges. First, there is no consensus on what the advancement of innovation entails, how to achieve it, and what the role of regulations and regulatory sandboxes should be in it. Second, there is a lack of clarity regarding the definition and functioning of regulatory sandboxes. Third, there is a risk of regulatory capture due to the close collaboration between regulators and regulates and potential lack of transparency regarding the choice of regulatory interventions within the sandbox. Drawing on Italy’s initial experiences with general and sector-specific regulatory sandboxes and existing scholarship on experimental regulatory instruments, this article contributes to the ongoing debate on regulation and innovation by critically examining the interplay between regulatory sandboxes and the promotion of responsible innovation. Furthermore, it explores the impact of regulatory sandboxes on the evolving collaborative dimensions of public law and provides policymakers and regulators with actionable insights for navigating this innovative regulatory tool.
Keywords: regulatory sandboxes; innovation; responsible innovation; experimental regulation; regulatory collaboration; regulatory capture; flexible regulation; AI Act; technological change