Table of Contents

Explaining Compliance

Explaining Compliance

Business Responses to Regulation

Edited by Christine Parker and Vibeke Lehmann Nielsen

Explaining Compliance consists of sixteen specially commissioned chapters by the world’s leading empirical researchers, examining whether and how businesses comply with regulation that is designed to affect positive behaviour changes.

Chapter 9: Strategizing Compliance and Enforcement: Responsive Regulation and Beyond

Neil Gunningham

Subjects: law - academic, corporate law and governance, regulation and governance


Neil Gunningham INTRODUCTION Effective enforcement is vital to the successful implementation of social legislation, as legislation that is not enforced rarely fulfils its social objectives. This chapter examines the question of how the enforcement task might be best conducted in order to achieve policy outcomes that are effective (in terms of reducing the incidence of social harm) and efficient (cost the least to both duty holders and the regulator), while also maintaining community confidence. It begins by summarizing the two strategies that for many years dominated the debate about enforcement strategy, that is, whether the more appropriate strategy for regulators is to ‘punish or persuade.’ Recognizing the deficiencies of this dichotomy, this chapter explores a number of more recent approaches that have proved increasingly influential on the policy debate. Such an examination must begin with John Braithwaite’s seminal contribution in favor of ‘responsive regulation.’ His approach conceives of regulation in terms of a dialogic culture in which regulators signal to industry their commitment to escalate their enforcement response whenever lower levels of intervention fail (Ayres and Braithwaite, 1992). Under this model regulators begin by assuming virtue (to which they respond with cooperative measures), but when their expectations are disappointed they respond with progressively punitive or coercive strategies until the regulatee conforms. This approach is taken further by Gunningham and Grabosky (1998) in Smart Regulation. ‘Smart regulation’ accepts Braithwaite’s arguments as to the benefits of escalating responses up an ‘enforcement pyramid’ and the virtues of expanding regulation beyond the dyadic (state)...

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