The “Compliance” Trap: The Moral Message in Responsive Regulatory Enforcement

Authors


  • Many thanks to Paul Ainsworth, Natalie Stepanenko, and John Braithwaite, who each contributed to the data collection and analysis on which this article is based, and to Amanda Scardamaglia for research assistance. Thanks also for many helpful comments to Julia Black, John Braithwaite, the anonymous referees, the editor, Vibeke Lehmann Nielsen, and participants at the 2004 RegNet Conference, the Australian National University, the regulation panel of the Socio-Legal Studies Association meeting in Glasgow in 2004, and the University of Melbourne Law Faculty seminar series. I am grateful to the Australian Competition and Consumer Commission (through its funding support for the Centre for Competition and Consumer Policy, Australian National University); the Australian Research Council; and the Regulatory Institutions Network, Australian National University, for funding this research. Much of this research was completed while I was on secondment to the Regulatory Institutions Network.

Please address correspondence to Christine Parker, Law School, University of Melbourne, VIC 3010, Australia; e-mail: c.parker@unimelb.edu.au.

Abstract

Simple deterrence will often fail to produce compliance commitment because it does not directly address business perceptions of the morality of regulated behavior. Responsive regulation, by contrast, seeks to build moral commitment to compliance with the law. This article shows that a regulator can overcome the deterrence trap to improve compliance commitment with the skillful use of responsive regulatory techniques that “leverage” the deterrence impact of its enforcement strategies with moral judgments. But this leads it into the “compliance trap.” The compliance trap occurs where there is a lack of political support for the moral seriousness of the law it must enforce, such as is the case with cartel enforcement in Australia. In these circumstances, business offenders are likely to interpret the moral leveraging of responsive regulation as unfair or stigmatizing, and business perceptions of regulator unfairness are likely to have a negative influence on long-term compliance with the law. Moreover, big businesses that perceive regulatory enforcement as illegitimate are also likely to actively lobby for the political emasculation of the regulator. In these circumstances, most regulators are likely to avoid conflict by taking the easy option of enforcing the law “softly,” and therefore ineffectively.

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