  Appropriately regulating artificial intelligence is an increasingly urgent
policy challenge. Legislatures and regulators lack the specialized knowledge
required to best translate public demands into legal requirements. Overreliance
on industry self-regulation fails to hold producers and users of AI systems
accountable to democratic demands. Regulatory markets, in which governments
require the targets of regulation to purchase regulatory services from a
private regulator, are proposed. This approach to AI regulation could overcome
the limitations of both command-and-control regulation and self-regulation.
Regulatory market could enable governments to establish policy priorities for
the regulation of AI, whilst relying on market forces and industry R&D efforts
to pioneer the methods of regulation that best achieve policymakers' stated
objectives.
