Voluntary hotel regulation as a political compromise

Abstract

The paper analyses the return of the hotel classification in Israel as a case of voluntary regulation regime by the state. The theory of such regimes explains why states resort to voluntary regulation, and what the preconditions for such a regime to succeed are. Applying this theory to the hotel classification case reveals that the incentive structure made the chances of the choice to succeed meager. Hence, the paper asks: Why, in spite of these conditions, the state chooses the voluntary regulation option? The paper argues that some challenges for the selection of such regime may be more critical than others, and depending on the institutional relations between the actors involved, voluntary regulation may reflect more political than regulatory rationale.