Participation, Government Legitimacy, and Regulatory Compliance in Emerging Economies: A Firm-Level Field Experiment in Vietnam

Abstract

This paper employs a field experiment in single-party–ruled Vietnam to test whether providing a broad-based representative sample of firms the opportunity to comment on draft regulations increases their subsequent compliance. We find three main outcomes of this treatment. First, treated firms exhibited greater improvement in their views of government’s regulatory authority. Second, these firms were more likely to allow government-affiliated auditors to examine their factories. Third, treated firms demonstrated greater compliance on the factory floor. Access and compliance were not explained by the receipt of advance information about the regulation’s requirements, and none of the three outcomes required that firms offer substantive comments.