The role of externalities and uncertainty in policy design: evidence from the regulation of genome editing

Abstract Externalities and uncertainty play an important role in the design of regulatory policies. Regulatory tools must be selected while taking into consideration the side-effects that regulated products or services have on other individuals and on the environment. This study investigates the externalities and uncertainty that arise from the use of genome editing (with specific reference to CRISPR technique) and how they relate to regulatory policy design choices. Building on evidence from genome editing regulation and on the NATO (Nodality, Authority, Treasure and Organization) policy tools framework, this study argues that a mix of regulatory tools is required to tackle externalities of genome editing applications and to cope with sources of uncertainty about their beneficial, neutral and harmful side-effects. The study provides some recommendations to policy-makers about reducing uncertainty, diversifying regulatory tools over time, and communicating to the public about features of genetically edited products.