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A socio‐economic theory of regulatory compliance

Jon G. Sutinen (Department of Environmental and Natural Resource Economics, University of Rhode Island, Kingston, USA)
K. Kuperan (Department of Natural Resource Economics, Universitü Pertanian Malaysia, Malaysia)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 1 January 1999

7200

Abstract

An enriched theoretical model of regulatory compliance is developed in this paper. The body of empirical evidence demonstrates that the pure deterrence model of regulatory compliance, which focuses primarily on the certainty and severity of sanctions as key determinants of compliance, provides only a partial explanation of compliance behavior. To offer a more complete explanation, the model developed herein integrates economic theory with theories from psychology and sociology to account for both tangible and intangible motivations influencing individuals’ decisions whether to comply with a given set of regulations. Specifically, the model accounts for moral obligation and social influence in addition to the conventional costs and revenues associated with illegal behavior. While cast in a natural resource management context, the theory developed here is applicable to a variety of institutional conditions. The resulting framework enables the design and implementation of more efficient compliance and regulatory programs than was heretofore possible.

Keywords

Citation

Sutinen, J.G. and Kuperan, K. (1999), "A socio‐economic theory of regulatory compliance", International Journal of Social Economics, Vol. 26 No. 1/2/3, pp. 174-193. https://doi.org/10.1108/03068299910229569

Publisher

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MCB UP Ltd

Copyright © 1999, MCB UP Limited

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