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Tools for Effective Regulation: Is “More” Always “Better”?

Published online by Cambridge University Press:  25 May 2018

Florentin BLANC Open the ORCID record for Florentin BLANC [Opens in a new window]
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Abstract

Regulatory inspections and enforcement are seen by many as a key instrument to ensure the effectiveness of regulations – it is broadly assumed to be essential to have supervision and “deterrence” to promote compliance with rules, and thus achievement of regulatory outcomes. However, this presupposes that rules are indeed adequate for reaching outcomes, and that control is what drives compliance with rules. A different approach suggests that compliance is more complex and driven by a combination of factors (ethics, social conformity, procedural justice and legitimacy etc), that rules are imperfect, and that risk-focused, risk-proportionate “regulatory delivery” will achieve better results, more “effectiveness”. Considering a case study of occupational safety inspections and outcomes in Britain, France and Germany, we observe that higher numbers of inspections are not correlated with less fatal incidents, and that, on the contrary, the best outcomes are achieved in the country having the least inspection visits, the most risk-focused system, and the broadest approach to “regulatory delivery”, combining engagement with regulated industries, guidance, responsive and risk-proportionate enforcement, and risk-based, targeted inspections.

Type
Symposium on Effective Law and Regulation
Information
European Journal of Risk Regulation , Volume 9 , Issue 3: Symposium on Effective Law and Regulation , September 2018 , pp. 465 - 482
Copyright
© Cambridge University Press 

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Footnotes

*

Phd. World Bank Group - Universita degli Studi Roma Tre.

References

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3 See Thaler, RH and Sunstein, CR, Nudge. Improving Decisions About Health, Wealth, and Happiness (Yale University Press 2008)Google Scholar. While it is frequently understood that the “nudge” approach is an alternative to regulation, it is in fact often better understood as an alternative to “command and control” regulation. For more on the use of behavioural economics in regulatory policy see Lunn, P, Regulatory Policy and Behavioural Economics (OECD 2014)CrossRefGoogle Scholar; Alemanno, A and Sibony, A-L, Nudge and the Law: A European Perspective (Hart Publishing 2015)Google Scholar.

4 Be it in positions of monopoly/oligopoly, or monopsony/oligopsony – in practice, most regulation focuses on (quasi-) monopolies linked to natural resources, utilities etc.

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17 Becker’s model chimes in with “traditional”, “pessimistic” views of compliance and is aligned with neo-classical economic assumptions (full rationality of market actors), and the most frequently taught compliance model in economics faculties.

18 See Balleisen, EJ, Bennear, LS, Krawiec, KD, Wiener, JB (eds), Policy Shocks: Recalibrating Risk and Regulation after Oil Spills, Nuclear Accidents and Financial Crises (Cambridge University Press 2017)CrossRefGoogle Scholar.

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23 The notion of “procedural justice” can be found already in Rawls, J, Theory of Justice (Harvard University Press 1971)Google Scholar. The development of this notion in a legal compliance perspective is due, eg, to the work of Leventhal, GS, “Fairness in Social Relationships” in JW Thibaut, JT Spence, RC Carson and JW Brehm (eds), Contemporary Topics in Social Psychology (General Learning Press 1976)Google Scholar, as well as Thibaut, JW and Walker, L, Procedural Justice: A Psychological Analysis (L Erlbaum Associates 1975)Google Scholar.

24 Tyler (2003), supra, note 22.

25 ibid 302.

26 Hodges, supra, note 20.

27 ibid 15–16.

28 cf Tversky, A and Kahneman, D, “Judgment under Uncertainty: Heuristics and Biases” (1974) 185 Science 1124 CrossRefGoogle ScholarPubMed; as well as LS Bennear, “Economic Analysis, Risk Regulation, and the Dynamics of Policy Regret” in Balleisen, et al (eds), supra, note 18; and Thaler and Sunstein, supra, note 3, 19–39.

29 A term that is broader than “drivers” in that it also includes elements that are rather “pre-requisites”, “enabling” factors.

30 The complexity (often under-estimated) of this group of “economic or material motivations that influence businesses to comply (or not) with regulatory dictates” is underlined by Simpson, SS and Rorie, M, “Motivating Compliance: Economic and Material Motives for Compliance” in C Parker and V Lehmann Nielsen (eds), Explaining Compliance: Business Responses to Regulation (Edward Elgar Publishing 2011) 59 Google Scholar: “our discussion acknowledges the importance of micro and macro distinctions and the linkages between organizational members and the company as a whole”.

31 Parker and Lehmann Nielsen, supra, note 30, 8: “understanding and explaining ‘compliance’ (…) requires mapping, understanding and testing the interactions of a complex range of factors and processes”.

32 Tyler (1990), supra, note 22–precisely because it attempts to capture all the different (and possibly conflicting) drivers, is a good example of such modesty and inclusiveness.

33 Hodges, supra, note 20.

34 Ayres, I and Braithwaite, J, Responsive Regulation: Transcending the Deregulation Debate (Oxford University Press 1992)Google Scholar.

57 Sources: Germany: Sicherheit und Gesundheit bei der Arbeit (SUGA), Unfallverhütungsbericht Arbeit [Accident prevention at work report] (German Safety and health at work, Federal Institute for Occupational Safety and Health 2013) 292–293; and Sicherheit und Gesundheit bei der Arbeit (SUGA), Unfallverhütungsbericht Arbeit [Accident prevention at work report] (German Safety and health at work, Federal Institute for Occupational Safety and Health 2015), 135, 143. Britain: HSE, Local Authority Enforcement Liaison Committee (HELA), HELA Meetings – Data Collection – analysis of LAE1 2012/13 data from Local Authorities; HSE, “Annual Report and Accounts (2011/2012–2016/2017)” [“Focus on Enforcement” data for 2012 and 2013]; Löfstedt, supra, note 40. France: Labour inspection data extrapolated from official reports based on estimated percentage of under-reporting indicated in same reports: Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2011–2015); missing years extrapolated from reported ones for CARSAT inspections.

35 Hawkins, K, Law as Last Resort – Prosecution Decision-Making in a Regulatory Agency (Oxford University Press 2003)CrossRefGoogle Scholar.

36 ibid 18.

37 Eg ibid; Tilindyte, L, Enforcing Health and Safety Regulation. A Comparative Economic Approach (Intersentia 2012)Google Scholar.

38 Eurostat ensures not only uniformity of definitions, but standardisation of incidence rates to correct for differences in economic structure.

39 See Department for Work and Pension, Good Health and Safety, Good for Everyone (French Ministry of Employment 2001), 10 Google Scholar – suggesting a 50/50 split; and Better Regulation Executive, Improving outcomes from health and safety (UK Department for Business Enterprise and Regulatory Reform 2008) 59 – indicating a 55/45 split LAs/HSE.

40 This is underpinned by the HSE’s regulatory function. It was strengthened following RE Löfstedt, Reclaiming Health and Safety for All: An Independent Review of Health and Safety Legislation (presented to the UK Parliament in 2011).

41 Hawkins, supra, note 35.

42 Sources: HSE, Annual Report and Accounts (2011/2012–2014/2015).

43 Tombs, S and Whyte, D, “A crisis of enforcement: The decriminalisation of death and injury at work” (2008) Briefing 6 Google Scholar

[Centre for Crime and Justice Studies], 8.

44 Tilindyte, supra, note 37, 149.

45 ibid 238.

46 Hawkins, supra, note 35, 10.

47 Data sources – see summaries at <ec.europa.eu/eurostat/statistics-explained/index.php/Accidents_and_injuries_statistics>, and <ec.europa.eu/health/sites/health/files/data_collection/docs/idb_report_2013_en.pdf> – detailed data comes from the Eurostat database, indicator “Causes of death – standardised death rate by residence [hlth_cd_asdr2]”.

48 All standardised incidence rates for fatal accidents are per 100,000 workers. For the methodology, see Eurostat, European Statistics on Accidents at Work (ESAW) – Summary Methodology (2013) – available at <ec.europa.eu/eurostat/en/web/products-manuals-and-guidelines/-/KS-RA-12-102>. Pre-2008 data excludes traffic and transport accidents.

49 The best ranked country including traffic accidents is Greece. The small difference between the rate excluding and including them may suggest under-reporting of the labour-related character of some road accidents (as its general road safety level has improved enormously, but remains worse than most of the OSH “good performers”). Over 1998–2007, Greece’s OSH performance is far worse, suggesting that its excellent rating post-2008 may be (in a paradox frequently observed in OSH) linked to the brutal economic crisis (the more “marginal” businesses close, activity is lower and more time is available, construction practically shuts down etc).

50 Due to change in methodology in 2008, this average is only for informational purposes.

51 Eurostat data from 1998–2007 refer to Great Britain and not the United Kingdom, as for the time frame 2008–2014.

52 Tilindyte, supra, note 37.

53 ibid 166–167, 175.

54 See Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2015) 9–26.

55 See Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2000, 2002–2015).

56 See in particular Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2000) [L’inspection du Travail en France en 2000 - les chiffres clés. Rapport au Bureau International du Travail, Ministère de l’emploi et de la solidarité, Paris, 2000]. This report indicates that all statistics on inspections published in the 1990s suffer from erratic reporting rates and low reporting accuracy, 190.

58 Löfstedt, supra, note 40, has recommended not inspecting businesses with no employees except when their type of activity could pose a significant risk to outsiders. This policy, while not having the force of law, is widely implemented in Britain. French Labour Inspectors focus on salaried workers, likewise, and not on self-employed. Sources for calculations: Eurostat, UK Office for National Statistics, Germany Statistiches Bundesamt, France INSEE.

59 One could even use this as a possible indication that OSH outcomes have no relation at all to inspections and enforcement practices. For the many reasons exposed in earlier chapters and sections, we believe this would be an excessive claim – but surely this example shows once again that there is no direct correlation between more inspections and better outcomes.

60 Tilindyte, supra, note 37, 230–274.

61 Available at <www.hse.gov.uk/notices/>.

62 Tilindyte, supra, note 37, 270–271.

63 Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2015) 102–291: fines in the first half-year after the legal changes, but all of these relating to illegal work. No data yet on its use in OSH.

64 HSE, Annual Report and Accounts (2014/2015) 28.

65 ibid 25. Directly comparing the number of prohibition notices is impossible because French inspectors’ powers to suspend operations used to be mostly restricted to construction sites (they were expanded in 2016), and otherwise they had to use a provisional relief judicial procedure, which happened only a few dozen times per year. The number of suspensions on construction sites is not reported as such. Extrapolating from available data, it is probably at least a few hundred per year.

66 Ayres and Braithwaite, supra, note 34.

67 Tilindyte, supra, note 37, 238–239.

68 Annexes to Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2015) 40.

69 Which do not necessarily amount to an offence – cf Tilindyte, supra, note 37, 191.

70 See World Bank Group, Inspections Integration Models (forthcoming 2018).

71 Tilindyte, supra, note 37, 182–184.

72 ibid.

73 ibid 184.

74 cf ibid 92–96.

75 The process was contentious. The Directive imposes mandatory prescriptions and does not use any language comparable to the British “So Far As Reasonably Practicable” (SFARP). “SFARP” was challenged before the CJEU in 2005 by the European Commission, but the CJEU found in favour of the UK [ibid 108], leaving the foundation of British OSH regulation unchanged.

76 ibid 165–166.

77 ibid 193–194, 239–240.

78 See Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2015) 55–65.

79 See <www.hse.gov.uk/campaigns/index.htm>.

80 Hawkins, supra, note 35.

81 Tilindyte, supra, note 37, 187–188.

82 See Direction générale du travail, L’inspection du Travail en France (French Ministry of Employment 2015) 31–32, 34–37, (and particularly) 38–41.

83 Tyler, TR, “Procedural Justice, Legitimacy, and the Effective Rule of Law” (2003) 30 Crime and Justice 283 CrossRefGoogle Scholar; Lind, EA and Arndt, C, “Perceived Fairness and Regulatory Policy: A Behavioural Science Perspective on Government-Citizen Interactions” (2016) 6 OECD Regulatory Policy Working PapersGoogle Scholar.

84 Blanc, F, From Chasing Violations to Managing Risks: Origins, challenges and evolutions in regulatory inspections (Edward Elgar forthcoming 2018)Google Scholar.

85 F Blanc, “Moving Away From Total Control in Former Communist Countries – the RRR in Inspections, and Lessons Learned from Reforming them” (2012) 3(3) European Journal of Risk Regulation.Google Scholar

86 See MM Kleiner, Licensing Occupations. Ensuring Quality or Restricting Competition? (Upjohn Press 2006)CrossRefGoogle Scholar.