The Regulation Dilemma: Cooperation and Conflict in Environmental Governance

Across the United States and around the world, businesses have joined voluntary governmental and nongovernmental environmental regulations. Such codes often require firms to establish internal environmental management systems to improve their environmental performance and regulatory compliance. Meanwhile, governments have been offering incentives to businesses that self-police their regulatory compliance and promptly report and correct violations. This article examines how governmental regulatory enforcement can influence firms' compliance with mandatory and voluntary regulations. Cooperative regulatory enforcement—in which firms self-police their environmental operations and governments provide regulatory relief for voluntarily disclosed violations—yields optimal win–win outcomes, but only when both sides cooperate. If firms are likely to evade compliance, governments are better off adopting a deterrence approach. If governments insist on rigidly interpreting and enforcing laws, firms may have incentives to evade regulations and not voluntary codes. Cooperation is possible through credible signals between firms and government.     

Judicious Incentives: International Public Policy Responses to the Globalization of Environmental Management

Public policymakers and regulators worldwide are grappling with the desire to improve environmental quality through appropriate regulation of business, while also streamlining government. Concurrently, environmentally conscience consumers are calling for improved environmental performance by industry. As a result of these pressures, regulators and lawmakers worldwide are attempting to craft effective policies that create adequate incentives for environmental protection on the part of firms, in the face of decreasing budgets and an increased demand for the use of market‐based incentives. To aid decision makers as they struggle with these concerns, this study provides a detailed case examination of the dilemmas and responses of national‐level regulators as they try to develop appropriate responses to the rise of international and “voluntary” management regimes. To accomplish these goals, this article compares the public policy responses of governments around the world to one such voluntary international environmental regime: ISO 14001. ISO 14001 is a form of industry self‐regulation in response to market forces calling for harmonization in environmental management and as a result of consumer and trade‐partner demands. This study examines the relationships between regulators and the regulated in order to understand if ISO 14001 certified firms are receiving regulatory relief or other forms of public policy/regulatory benefits as a result of their certification. It will also examine the impact that government incentives (or their absence) are having on the certification decisions of firms around the world. This information helps us to begin to understand how the trends toward smaller government and voluntary environmental regimes are affecting one another.     

Corporate response strategies to regulatory uncertainty: evidence from uncertainty about post-Kyoto regulation

A better understanding of firms’ response strategies to regulatory uncertainty enables policymakers to improve policymaking efficiency and to enhance the effectiveness of regulation. Based on a literature review, we categorize responses according to their objective toward regulatory uncertainty into four strategies: avoidance, reduction, adaptation, and disregard strategies. Unique data from a worldwide cross-industry survey show that firms predominantly pursue reduction, and to a lesser extent adaptation and disregard strategies, in response to post-Kyoto regulatory uncertainty. Surprisingly, firms in fact only sporadically pursue avoidance strategies, in contradiction to their own public announcements commonly made during policymaking to realize such strategies. The degree of regulatory uncertainty perceived and its interpretation as a threat increase the pursuit of most of these strategies. In addition, firms’ response strategies to post-Kyoto regulatory uncertainty differ across industries and partly across regions.     

Voluntary Regulations and Innovation: The Case of ISO 14001

Governments enact environmental regulations to compel firms to internalize pollution externalities. Critics contend that regulations encourage technological lock‐ins and stifle innovation. Challenging this view, the Porter‐Linde hypothesis suggests that appropriately designed regulations can spur innovation because (1) pollution reflects resource waste; (2) regulations focus firms’ attention on waste; and (3) with regulation‐induced focus, firms are incentivized to innovate to reduce waste. This article explores the regulation–innovation linkage in the context of voluntary regulations. The authors focus on ISO 14001, the most widely adopted voluntary environmental program in the world. Examining a panel of 79 countries for the period 1996–2009, they find that country‐level ISO 14001 participation is a significant predictor of a country's environmental patent applications, a standard proxy for innovation activity. The policy implication is that public managers should consider voluntary regulation's second‐order effects on innovation, beyond their first‐order effects on pollution and regulatory compliance.     

Corporate policy entrepreneurship and cross-boundary strategies: How a private corporation champions mobile healthcare payment innovation in China?

The private nature of corporate actors does not necessarily preclude them from contributing to public interest. When business strategies and genuine public motivation are favorably aligned, corporate actors from the private sector can also drive public sector innovations. For a private corporation, policy entrepreneurship inherently entails crossing not only the public–private boundary but also various policy domains. This study formulates five propositions to characterize the cross-boundary strategies of corporate policy entrepreneurship, a distinct form of policy entrepreneurship in a developing authoritarian state. The case study of mobile healthcare payment innovation in China finds that the corporate entrepreneur used a series of cross-boundary strategies adeptly that eventually made the innovation not only adopted in one locality but also rapidly diffused nationwide. These strategies were not used in isolation or in a pure stepwise fashion but appeared to be recursive and interactive, suggesting the dynamic nature of corporate policy entrepreneurship in a multilevel governance system. More studies could be done to further examine strategies and processes of other forms of policy entrepreneurship in various national and sectoral settings.     

Exploring the actions of Government Affairs Managers during economic and financial crises—an exploratory study in the European Union

This paper is a response to the paucity of theoretical and empirical research into the political actions undertaken by organisations to influence policymakers' responses to economic and financial crises. By using original, primary data gathered from semi‐structured interviews conducted with Brussels‐based Government Affairs Managers of multi‐national enterprises, it reports the results of inductive, exploratory research into corporate political activity during the 2007–2011 financial crisis. Results suggest that not all firms are in favour of increased regulatory intervention during times of economic upheaval. They also imply that, during recessions, firms are more likely to seek long‐term as opposed to short‐term relationships with policymakers, they also have a greater propensity to engage in collective political action than individual political action and they use information strategies more frequently than constituency‐building and financial‐incentive strategies. These results are subsequently used as the basis for a conceptual framework that draws on numerous theoretical traditions to capture the antecedents of firms' political behaviours during economic crises. Given the absence of theoretical and empirical work that actively engages with this issue, the research makes important contributions to the existing literature on corporate political activity. It also has practical implications for corporate political strategists and policymakers. Copyright © 2012 John Wiley & Sons, Ltd.     

Corporate Environmentalism, Regulatory Reform, and Industry Self-Regulation: Toward Genuine Regulatory Reinvention in the United States

Increasingly, corporations are proactively managing environmental impacts in response to pressures from the consumer, business-to-business, financial, and government procurement markets. In many cases, these efforts have produced results well beyond what could be required under public regulations. Although the U.S. Environmental Protection Agency began a process of regulatory reinvention in the 1990s as a means of promoting such innovations, the results have been somewhat disappointing. This article examines the recent trends in corporate environmental management and regulatory reform. It concludes with a discussion of changes in regulatory design that could promote ongoing gains in corporate environmental performance through the creation of a hybrid system combining elements of public regulation, government-supervised corporate self-regulation, mandatory information disclosure, and green procurement.     

State Environmental Regulation and Economic Development: Are They Compatible?

An underlyingussumption of the partial preemption apprmh is the belief that minimum federal standmds contribute to the prospective decentralization of environmental protection programs by removing or reducing industry incentives to shop aroundfor states with a more lenient regulatory stance. This assumption was examined through a survey of chief executive oficers of pollution-generating firms. Tlze data suggest that corporate officials see regulatory climate m an important component of overhead ctxits. The author concludes that the desire to retain industries within state boundaries does inhibit the promulgation of strict environmental regulat ions by public officials.     

Against Privatization in China: A Historical and Empirical Argument

Reform in China’s urban public sector has been so contentious that the nature, function, validity and viability of state firms require clarifications. First of a two-part critique, this essay assesses the outcomes and wider consequences of China’s largely free wheeling process of privatization as compared to the rationale claimed for its instigation. By identifying the ideological and political forces behind that process, the essay further seeks to explain the erosion of public policy capacities pivotal for social defence in market globalization, thereby demonstrating the need to reorient the reform. Losing the opportunity to reinvigorate a sizable and strong state sector capable of healthy interactions with other sectors is shown to be especially damaging in developing and transitional societies, which in turn negatively impacts both global economy and ecology.     

Public Sector Reform in Australia: An Evaluation of the Corporatisation of Sydney Water, 1995 to 2002

The corporatisation of Sydney Water from 1995 onwards formed part of a much broader process of public sector reform in Australia. However, Sydney Water represents an unusual case study of corporatisation since it has embodied two distinct forms of corporate structure over the period 1995 to 2002; both the company model and the statutory model. This article seeks to evaluate the success or otherwise of this corporatisation process using ‘internal’ measures of the performance appraisals undertaken by ‘outside’ bodies in six main forums: The independent assessments against operating licence conditions; NSW government's annual assessments of government businesses performance; Sydney Water's own performance measurement against corporate business plans; water reform measures stipulated by the Council of Australian Governments; industry financial performance indicators as measured by the Water Services Association of Australia; and an international assessment conducted by the UK Office of Water Services.     

Corporate Entrepreneurship in the Public Sector: The Dance of the Chameleon

This article explores the application of corporate entrepreneurship within the public sector. It outlines research that investigates whether those factors, which the literature describes as stimulating corporate entrepreneurship in the private sector, apply to the public sector. It concludes that entrepreneurship is a strategic phenomenon and, as a consequence, the unique environmental influences on public sector bodies generate stimulants and constraints to corporate entrepreneurship,which vary from those applicable to the private sector.     

NOT JUST BRICKS AND MORTAR: EEO IN HOMESWEST

Abstract: Moves by both state and federal governments to implement private sector management practices in government administration have received attention from a number of writers. Feminist critics of corporate management argue that, in very devolved situations, public sector management concentrates on the achievement of program outcomes to the detriment of other management objectives and Equal Employment Opportunity is ignored. The contention that efficiency and effectiveness are promoted at the expense of equity under a regime of public sector corporate management will be addressed through a case study of the West Australian Housing Commission, Homeswest. This paper examines the results of Equal Employment Opportunity programs in a highly corporatised state government agency.     

A social-ecological approach to voluntary environmental initiatives: the case of nature-based tourism

This paper addresses the role of voluntary environmental initiatives by the tourism industry to alleviate social dilemmas for the management of natural resources. The objective is to explore whether previous findings on the determinants of voluntary action in the management of common-pool resources (CPR) also apply to a sector, such as tourism, where non-extractive uses are dominant. The paper applies the social-ecological systems framework recently developed by Ostrom (Science, 325, 419–422, 2009) to analyze qualitative data from meta-analyses of successful voluntary environmental initiatives in tourism. Results show that the determinants of voluntary action in tourism are partially consistent with previous research on CPR, finding relevant the presence of leadership, norms of behavior among members of the voluntary initiatives, shared mental modes, salience of the resource for users, and substantial productivity of the resource system in the likelihood of self-organization. However, other variables that have been shown to be relevant in non-tourism CPR situations are not supported by this analysis, such as: most variables regarding the ecological system (its size, predictability, and the mobility of its derived resource units) as well as the number of users and supportive collective choice rules that enable users to craft and enforce some of their own rules. The implications of this partial mismatch in findings are not straightforward. The paper presents a set of research questions that open a path for further research.     

Money Talks: The Environmental Impact of China's Green Credit Policy

This study examines the impact of China's green credit policy on the environment. In particular, we consider an initiative that requires all banks to base their loan decisions on corporate environmental performance. This is an important issue since it is globally gaining popularity to leverage bank loans as an avenue to enforce corporate environmental responsibility. Moreover, there are only a handful of empirical investigations in relation to the impacts of credit constraint on corporate environmental behaviors and strategies. This research also provides useful insights on how to enhance environmental regulation enforcement, using the Environmental Protection Bureau in partnership with local banks to exert a creditable threat of financial constraint on unfavorable environmental outcomes. Using the synthetic control method and difference‐in‐differences analysis, we find that this policy has significantly motivated firms, particularly those firms with a higher dependence on external financing, to reduce water pollution. We further discover that the policy compels firms to favor pollution prevention at the source instead of end‐of‐pipe treatments, since the policy imposes a long‐term credit constraint on pollution.     

Export processing zones and corporate environmental performance in emerging economies: The case of the oil,gas, and chemical sectors of Trinidad and Tobago

Export processing zones (EPZs) are increasingly being established to promote economic growth in developing countries. However, they remain controversial and are often criticized for being associated with a “race to the bottom” characterized by the easing of labor and environmental standards. This paper investigates whether the decision to locate facilities inside these zones is associated with higher corporate environmental performance. Findings indicate that facilities operating in Trinidad and Tobago’s EPZs are more likely to show higher corporate environmental performance than those outside. Additionally, firms in state-managed zones appear to show higher corporate environmental performance than those located in privately managed zones. Enhanced institutional pressures from regulators, local communities, and fellow tenant firms may explain these differences. These results suggest that environmental policy makers and environmentalists can take advantage of already established EPZs to promote enclave enhanced institutional pressures associated with superior corporate environmental performance.

Public Sector Corporate Governance Disclosures: An Examination of Annual Reporting Practices in Queensland

In the public sector, corporate governance is an expression that is yet to be explicitly defined. This paper examines the existing public sector literature in order to derive a set of broad principles of corporate governance in the public sector. These principles are then applied through a content analysis of corporate governance disclosures in a group of government‐owned corporations, state government departments, local governments and statutory bodies. The results indicate the set of principles derived is generally applicable to various forms of public entities. However, due to a lack of an established public sector corporate governance framework, the disclosure of corporate governance is piecemeal. Government‐owned corporations achieved better disclosure practices in most principles than other public sector bodies. The paper aims to stimulate debate on public sector corporate governance and provides a basis for a more extensive survey on corporate governance disclosures.     

A Negotiated Economy? Public Regulation of the Manufacturing Sector in Denmark

The concept of the negotiated economy intuitively catches important developments in state-market relations. The fruitfulness of the recent development of the negotiated economy as a macro concept is questioned. Two theses deduced from the concept are tested against public regulation of the Danish manufacturing sector. Although regulatory demands on manufacturing firms have increased the complexity of the political environment of firms. the negotiated economy is not an adequate theoretical concept for describing and explaining the increased interdependence of state and market. The negotiated economy might be useful at the sector or sub-sector level, but for empirical analysis the concept should be more precisely defined.     

Regulatory reform in the era of new technological development: The role of organizational factors in the public sector

What is the role of organizational factors in fostering regulatory reform in response to new technological development? Existing studies provide useful frameworks to understand regulatory reform in rapidly changing circumstances but still lack a systematic analysis of how organizational factors affect regulatory reform in the public sector. To fill this gap, we examine the impact of several institutional elements that are central to defining organizational characteristics, such as job tasks, bureaucratic autonomy, and organizational culture. We theorize that regulatory reform is more likely when public sector organizations are more receptive to external changes, which are determined by these characteristics. We leverage original surveys from over 1,000 civil servants in Korea, one of the front runners in new technological development, and find support for our prediction. We find that the implementation of regulatory reforms is more likely when (i) organizational tasks are relevant to scientific and technological development, (ii) higher levels of bureaucratic autonomy are granted, (iii) agency heads demonstrate stronger leadership, and (iv) organizational culture is less authoritarian. Our study makes clear contributions to the literature on public management and regulation theory, and has important implications for regulatory reform in the face of new technological development.     

State Reform in Turkey: Reasons, Needs and Strategies

The state structure in Turkey including all its branches of government (executive, legislative and judicial) at both the national and local levels has been shown to be ineffective, even irrelevant, to the ingrained demographic, social, economic and political exigencies of the country. One of the main reasons behind this is the collapse of public finance. Conventional rhetoric limiting solutions to administrative reform fails to provide a sufficiently broad enough context within which public sector reform in Turkey can be discussed. Turkey's determination to become a full member of the EU also necessitates a comprehensive and radical overhaul of the Turkish public sector with respect to efficiency and productivity. Five main strategies are proposed to assist Turkey in overcoming its state governance predicament: initiating and carrying out a state-wide reform by employing modern principles of public management; understanding and solving the problem of internal and external debts; enhancing the conditions of governance; reintroduc-ing and strengthening the principle of meritocracy in public sector and cooperating more with the EU.     

Excellence at What Cost? Austerity and the Reform of the School System in England (2010–2016)

The reform of the school system, which has been conducted by the Coalition and Conservative governments since 2010, has largely been austerity‐driven. In spite of the governments’ pledge to protect their budgets, schools have been severely hit by spending cuts. The reform programme has itself been integral to the fiscal consolidation plans by promoting a more cost‐effective system of state schooling. This article discusses the relationship between austerity and reform, and looks at the consequences for the concept of public service. Some specific aspects of the new institutional framework are examined, especially the creation of an independent state sector made up of academies and free schools, which has entrenched the involvement of private sector firms in education. The overhaul of the school system, which started nearly thirty years ago, has now reached a new decisive stage. However, considering the complex relationship between multiple actors and the opposing forces at work, one cannot say with any certainty that it will cause the demise of public service state education.