Voluntary Regulatory Compliance in Theory and Practice: The Case of Osha
54 Pages Posted: 3 Nov 1999
Abstract
Although regulators and commentators have enthusiastically embraced voluntary regulatory compliance as a means around the "ossification" of rulemaking and budget constraints, there has been limited analysis of the extent to which it protects the environment, workers or consumers. We first construct an economic model to analyze incentives that may induce an economic actor to engage in voluntary regulatory compliance. This model integrates the various incentives facing an economic actor, positive and negative, to engage in voluntary regulatory compliance. We then evaluate empirical evidence to see whether such incentives have induced voluntary action. This inquiry focuses on voluntary regulatory compliance in the OSHA context, but it also considers evidence of voluntary compliance in other contexts, particularly environmental protection. Our analysis suggests that voluntary compliance can induce greater protection of the environment, workers or consumers, but only in narrowly circumscribed circumstances. Even when voluntary compliance is effective, it likely provides less protection than does regulation. And incentives for voluntary compliance are weakest in inducing protection of workers, so they should be relied on with greater caution in that sphere.
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