1. Rules, Control, Compliance, Outcomes
COMPLEX INTERACTIONS – LESSONS LEARNED
Florentin blanc – September 2016

2. Policy goals, regulations, outcomes
Policies are defined generally with at least some instrumental goals – effects that are pursued (though a number of policies are more ‘symbolic’ and based on values than potential ‘utility’)
Regulations (of all kinds) are a frequent instrument of policy – they appear to ‘cost nothing’, they also have ‘symbolic’ value, they are easy to fit in a ‘political discourse’
Regulations include both ‘substantive provisions’ (what ppl are expected to comply with) and ‘procedures’ (supposed to ensure compliance)
Do regulations (legislation) with instrumental goals indeed deliver intended outcomes? To what extent?

3. From rules to outcomes – a complicated path
Rules are expected to produce results (policy outcomes) by changing behaviours. To succeed, they need to be adequately designed – so compliance ≈ desired outcome. But this is impossible to achieve 100% (cf. Diver, Baldwin, WRR etc.). Unintended consequences, creative compliance etc.
Compliance is not always enough. Even then: how to achieve it? How to change behaviours? Are the procedures designed to produce it effective? What are the drivers that effectively contribute to shape behaviours?
Procedures, institutions, approaches, methods, practices used to ensure regulatory compliance differ widely b/ween countries, domains. Many untested assumptions. What does evidence show?

4. Different visions, different approaches
Ensure everything is right before letting people start. Require license and permits for many activities, establishments etc.
Frequent checks of establishments to ensure they comply. Strict requirements, precise specifications. Zero tolerance.
Analyze risks, focus resources and make more stringent demands where they are high. Modulate enforcement based on risk, overall compliance ‘attitude’/record etc.
Seek to change behaviour through information, outreach, cooperation, publicity (+ and -) etc.
Also considerable differences in institutional structures (specialized vs unified, national vs local etc.), resources, skills and training, performance management etc.

5. Different attitudes towards discretion
“Frontline regulators” (inspectors, licensing officers etc.) are daily in situations where they have to assess whether compliance is achieved or not, and what decisions to make on this basis
Conceptions of whether these regulatory officers should have discretion in assessing compliance and taking decisions (permitting, enforcing) vary widely – with some seeing discretion as harming equality, equal protection etc.
While some institutions “embrace” discretion and issue guidance to their officers to “frame” it – others refuse it (strictly rules-bound, zero tolerance etc.) – and in other cases regulatory officers are left with full freedom without any “structure” to limit discretion
Can discretion be avoided at all? Should it be? What outcomes result from these different approaches?

6. …are we doing the right thing?…
In mid 2000s, City of Westminster (UK) food safety inspectors found regular serious violations in their Chinatown restaurants – inspections did not bring any improvement – situation was really hazardous
In Nairobi (Kenya), municipal inspectors say they have to inspect businesses in slums because there are so many serious violations of regulations there – and no improvement, so they inspect again
In France, the introduction of the 2004 Hygiene Package led to a number of small-scale cheese makers closing because they feared they could not fulfill the requirements – but no recent contamination event linked to cheese has come from such producers…
Research in the Netherlands suggests all observed fire accidents and fatalities were linked to building faults that normal inspections (and permits) had no ability to prevent

7. Experience of many countries, domains
Food safety, occupational safety and health, fire and building safety, environmental protection etc.
US (Federal/States), Britain, Germany, France, Netherlands, Italy, Greece, Eastern Europe, Former Soviet Union etc.
Which methods would you think belongs where? Ex ante permitting, systematic tight control, risk based enforcement, ‘cooperative’ approaches? How about resources (skills, numbers etc.)? Who has more, less…?
And what results do these produce?
Do people act based on calculations (deterrence), social norms, moral values, personal experiences etc.?

8. Findings from practice(1) – OSH in GB, DE, FR
Different institutional structures, different resources, different scopes of work – but at least partially similar goals
Comparisons simplified by existence of harmonized statistics (Eurostat) – fatal accidents most reliable indicator
Contrasted approaches:
Risk focused visits, risk proportional enforcement, efforts to provide guidance and advice, few inspections (5x less) in GB
Specialized visits (State inspections + technical insurances), detailed specifications, frequent inspections (5x more) in DE
Relatively frequent inspections (>> GB), different specialists (State, med.insurance), ‘zero tolerance’ in FR
One country ‘best in EU’, one ‘gradually catching up but still behind’, and one ‘worse than EU-28 average’. Who is who?

9. Findings from practice(2) – snippets from around the Globe
Greece: very intense use of prior approvals – very detailed specifications – what are the effects?
Former Soviet Union, many developing countries – very frequent, repeated inspections – with what outcomes?
United States: comparing states/activities with/without licensing – what differences? (M. Kleiner)
Georgia: drastic, radical cuts in enforcement, procedures – what changed?
Britain, Lithuania etc. – efforts to improve guidance and advice, professionalism, methods, targeting etc.
Discretion in OSH: “structured” in GB, zero in US, complete inspector autonomy in FR…

10. Not only what you do, but how you do it…
France labour inspectors are so intensely in conflict with employers that police protection is frequently sought (cf. yearly report to ILO)
US OSHA inspectors have extremely little discretion, this has been “designed out” from 1970 OSH Act. 100% rules bound.
Greece licensing officials – many highly qualified engineers etc. – but system based on distrust, command-and-control
“They will find problems anyway, however hard we try”…
Who appreciates having strangers tell how to do one’s job?
How many officials have tried “trading places” to see (or even think) how it may look from the other side?

11. Procedural justice to improve regulatory outcomes
Procedural justice (handling those subject to power in a fair way in terms of process) appears to improve legitimacy, acceptance of decisions in all areas of life (from classroom to courtroom…)
Applied to regulatory issues, it combines with other drivers of increased compliance:
Explaining rules is both needed from a ‘rational calculations’ perspective (cannot comply w/out knowledge) and proc.just. (officials told me what to do, why, how etc.)
Risk-based approaches perform better in terms of allocating scarce enforcement resources – also improve proc.just. (it is clear why they check, whom/what, w. which criteria etc.)
Involves to change the way officials see ‘duty holders’, themselves, their role and mission

12. Complementary compliance drivers
Enabling Conditions
Knowledge, technical capacity
Financial ability to comply
Economic Incentives
Deterrence (control, enforcement)
Economic benefits of compliance (reputation…)
Social and Cultural Drivers
Conformity (“everyone does it”)
Ethics (“this is the right thing to do”)
Legitimacy and Interactions
Legitimacy of authorities
Procedural justice in interaction with regulators
Tension between more deterrence and more legitimacy

13. Apparently small changes, potentially large results?
Some changes (e.g. improved risk-based targeting) require significant investment (at least in terms of time) to change methods, systems etc. Other changes appear “lighter” but require real efforts to happen (behaviour of officials)
Treating people differently and providing them with guidance in a more “proactive” way is, in comparison with other changes, relatively “low cost” (no major increase in human resources or IT investments required…)
It appears to be able to yield major payoffs – think about GB HSE inspectors vs. France’s Labour Inspectors – attitude, approach, results – the difference is not in resources…

14. Interconnected problems
High burden (high cost)
Low legitimacy
Low effectiveness

15. Brief conclusions
A multi-faceted view of compliance and of behaviour change is needed – no single factor explains all
“Too much” deterrence can actually decrease compliance / worsen outcomes because it harms legitimacy etc.
A balanced, risk based approach tends to perform best
Findings appear in other areas, not just in business regulation…
There is a ‘vicious cycle’ of heavy bureaucratic control and poor compliance – to break it requires to change on the ‘official’ side first (culture can change, it is not a constant)
Evidence is strongly in favour of risk-based, risk-proportional, compliance-promoting approaches, incorporating procedural justice perspective – all things being equal…but there also may be a ‘floor’ in terms of resources / deterrence below which things start to get worse (studies, US OSHA example)

16. Some reading…
Maguire, L.A. and Lind E.A. (2003), ‘Public participation in environmental decisions: stakeholders, authorities and procedural justice’, International Journal of Global Environmental Issues, volume 3, number 2/2003, pp
Tyler, T.R. (2003), “Procedural Justice, Legitimacy, and the Effective Rule of Law”, Crime and Justice, volume 30, pp
Kleiner, M.M. (2006), Licensing occupations. Ensuring quality or restricting competition?, Kalamazoo: W. Upjohn Institute for Employment Research
Voermans, W.J.M., (2007), “De aspirinewerking van sancties” in Bruikbare wetgeving, preadviezen van Ph. Eijlander en P. Popelier aan de Vereniging voor wetgeving en wetgevingsbeleid, L. Loeber (ed.), Wolff Legal Publishers, Nijmegen 2007, p , available at:
World Bank Group (2011), How to Reform Business Inspections: Design, Implementation, Challenges, World Bank Group, Washington, DC,
Blanc, F. (2012), Reforming Inspections: Why, How and with What Results?, Paris: Organization for Economic Cooperation and Development,
Organization for Economic Cooperation and Development (2014), Regulatory Enforcement and Inspections – Best Practice Principles for Regulatory Policy, Paris: Organization for Economic Cooperation and Development, available at:
Organization for Economic Cooperation and Development (2015), Regulatory Policy in Lithuania. Focusing on the Delivery Side, Paris, Organization for Economic Cooperation and Development, policy-in-lithuania en.htm
Department of Treasury / Council of Economic Advisers / Department of Labor (2015), Occupational licensing: A framework for policymakers, available at:
Blanc, F., Macrae, D. and Ottimofiore, G. (2015), Understanding and addressing the risk regulation reflex. Lessons from international experience in dealing with risk, responsibility and regulation, Netherlands Ministry of Internal Affairs, The Hague – available at: reflex
Faure, M. and Blanc, F. (forthcoming), Smart enforcement – theory and practice (article)
Blanc, F. (forthcoming), From Chasing Violations to Managing Risks