The Desirability of Forgiveness in Regulatory Enforcement

Arun Malik ()
Additional contact information
Arun Malik: Department of Economics/Institute for International Economic Policy, George Washington University

Working Papers from The George Washington University, Institute for International Economic Policy

Abstract: I present a model that explains two common features of regulatory enforcement: selective forgiveness of noncompliance, and the collection of information on a firms compliance activities and not just its compliance status. I show that forgiving noncompliance is optimal if the information on a firms compliance activities constitutes sufficiently strong evidence of the firm having exerted a high level of compliance effort. The key benefit of forgiving noncompliance is a reduction in the probability with which the firm needs to be monitored. If fines are costly, a further benefit is a reduction in fine costs.

Keywords: enforcement of regulation; selective enforcement; forgiving noncompliance (search for similar items in EconPapers)
JEL-codes: D86 K32 K42 L51 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.gwu.edu/~iiep/assets/docs/papers/Malik_IIEPWP2008-14.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gwi:wpaper:2008-14

Access Statistics for this paper

More papers in Working Papers from The George Washington University, Institute for International Economic Policy Contact information at EDIRC.
Bibliographic data for series maintained by Kyle Renner ().