Abstract
AbstractLittle evidence exists on whether and why organizations comply with regulations that are not monitored or enforced. To address that shortage, this study evaluates the 2007 repeal of an essentially unenforced regulation mandating private and local government employers in Sweden to post their vacancies publicly at the Public Employment Service. Exploiting the fact that central government employers were not affected, difference‐in‐differences analyses identify a substantial negative effect of the repeal on local government employers' vacancy posting propensity – with similar results for the private sector. At odds with deterrence models of regulatory compliance, these findings hint at an important role for organizational factors related to cultures and norms. Heterogeneity analyses indicate that local governments with more law‐abiding organizational culture and stronger social responsibility commitment were more prone to comply with the unenforced regulation. The results thus simultaneously point to an untapped potential and to some possible preconditions for unenforced regulatory strategies.
Highlights
A growing number of pressing societal challenges – ranging from the prevention of global warming and pandemics to the promotion of inclusive labor markets – require public policy for which a successful outcome hinges on regulatory compliance by private actors; not least by firms
There is a general agreement in this literature that regulatory compliance is a complex process, the field is divided with respect to which type of input factors is more important: external deterrence factors or internal organizational factors (Coglianese & Kagan 2007; Galle 2017)
The analyses reported here provide largely consistent evidence that the repeal of the LUPV, taking effect in 2007q3, led to a considerable reduction in the propensity of regulated employers to post vacancy orders at the Public Employment Service (PES)
Summary
A growing number of pressing societal challenges – ranging from the prevention of global warming and pandemics to the promotion of inclusive labor markets – require public policy for which a successful outcome hinges on regulatory compliance by private actors; not least by firms. There is a general agreement in this literature that regulatory compliance is a complex process, the field is divided with respect to which type of input factors is more important: external deterrence factors or internal organizational factors (Coglianese & Kagan 2007; Galle 2017) Work in the former strand stresses the importance of monitoring and enforcement on the part of the regulator, arguing that the existence of a regulatory system that provides sufficiently certain and/or severe formal sanctions against violations is crucial to deter utility-maximizing corporate actors from shirking (e.g., Block et al 1981; Potoski & Prakash 2011; Markell & Glicksman 2014).
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