Can sandboxes change regulation permanently?

A more skeptical reading is that sandboxes may change regulation indirectly and in a deregulatory direction: by normalizing waivers, privileging firms inside the program, and shaping regulators’ understanding around participants’ interests. Existing research questions whether sandbox learning generalizes to the wider public, whether benefits extend beyond firms, and whether the model creates legitimacy and compliance problems.

• Sandboxes may produce lasting deregulatory effects by normalizing reduced protections or regulatory rollbacks, even when formal rules are not immediately changed.
• Benefits documented for participating technology firms do not establish that sandboxes improve regulation or outcomes for the broader public.
• Closed, discretionary admission can favor firms already near compliance and make the existing regulatory baseline resistant to disruptive innovation.
• Critics argue that sandboxes can create regulatory privilege, unequal treatment, compliance difficulties, and legitimacy concerns.
• A sandbox’s lessons may be too narrow or context-dependent to justify permanent, general rules without additional evidence and safeguards.

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