Deterrence and the Impact of Calculative Thinking on Business Compliance with Regulation

69 Pages Posted: 23 Dec 2009 Last revised: 13 Aug 2014

See all articles by Christine Parker

Christine Parker

Melbourne Law School, University of Melbourne

Vibeke Lehmann Nielsen

University of Aarhus - Department of Political Science

Date Written: December 23, 2009

Abstract

Policy responses to corporate misconduct often advocate higher sanctions for better deterrence. This assumes that businesses make decisions about their regulatory compliance behaviour on the basis of self-interested calculations about the costs and gains of that behaviour. But policy-makers often assume that this automatically means higher sanctions will equal more compliance. This paper sets out a more holistic model of calculative thinking about the costs and gains of compliance and non-compliance. We go on to test this model using data about business compliance with Australian consumer protection and competition regulation. We find that enforcement probability is more important than sanction severity, and that business belief in the positive ‘business case’ for compliance is also important.

Keywords: deterrence, compliance, business regulation, competition law, consumer protection law

JEL Classification: K21, K42

Suggested Citation

Parker, Christine and Nielsen, Vibeke Lehmann, Deterrence and the Impact of Calculative Thinking on Business Compliance with Regulation (December 23, 2009). Available at SSRN: https://ssrn.com/abstract=1527326 or http://dx.doi.org/10.2139/ssrn.1527326

Christine Parker (Contact Author)

Melbourne Law School, University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

HOME PAGE: http://law.unimelb.edu.au/about/staff/christine-parker

Vibeke Lehmann Nielsen

University of Aarhus - Department of Political Science ( email )

Bartholins Allé è
DK-8000 Aarhus, 8000
Denmark

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
246
Abstract Views
1,731
rank
133,600
PlumX Metrics