There is an ongoing debate in law and accounting about the relative merits of principle-based versus rule-based regulatory systems. In this paper we characterize what kind of reasoning underlies the two styles of regulation. We adapt an original account of Verheij et al. (1998) to take aspects of the implementation context into account, such as the process of adoption of a new norm and the roles of the participants. The model is validated by a comparison between EU and US customs regulations intended to enhance safety and security in international trade. The EU regulations (AEO self-assessment) are essentially principle-based, whereas the American system (C-TPAT) is rule-based.
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