Empowerment of Whom and for What? Financial Literacy Education and the New Regulation of Consumer Financial Services

Financial regulators in many states recently have obtained statutory mandates to enhance consumer financial literacy. This paper investigates the development of policy pursuant to such mandates in the UK and Canada to identify how national regulators represent the role of the literate consumer in the financial market place. It finds that regulators in both countries represent financial education as empowering consumers but that each embeds in its policy an implicit normative ordering of responsible consumer behavior. The paper relates the tension between empowerment and responsibilization aspects of literacy enhancement to policy goals of expanding financial markets and assisting financial regulators to manage consumers' expectations of protection. It raises questions about regulators' use of consumer education to responsibilize consumption of financial products and calls for further research on the international growth of financial literacy education as a regulatory project.     

The Limits of the Economic Analysis of Regulation: An Empirical Case and a Case for Empiricism*

Can the tools of the economic analysis of law be used to identify the optimal level of stringency in regulatory standards? Data on the costs of nursing home regulatory compliance suggest that in this domain such models could only produce wildly false estimates of the optimal level of stringency. Among the reasons for this are that: (a) actual costs of compliance explain only 19 percent of the variance in the subjectively expected costs that should inform rational choices; and (b) while there is a powerful effect of expected cost on compliance disaggregated by standard, this is not a monotonic increasing effect but a parabolic relationship. The reason for the finding that almost half the nursing homes lie on the wrong side of the turning point of this parabola is that these homes tend to be run by managers who are “disengagers” from the regulatory culture. Their behavior is not to be understood in terms of rational game playing but in terms of dropping out of the regulatory game. The disengagers are in the regulatory system but not of it and certainly not economically calculative about it.     

CRIMINOLOGICAL THEORIES AND REGULATORY COMPLIANCE*

Four traditional criminological theories—opportunity, control, subcultural, and differential association—are tested for their explanatory power in accounting for organizational compliance with regulatory laws. The primary data source is interviews with 410 chief executives of small organizations. Partial support is found for each theory; certain key concepts of each theory have a significant effect on regulatory compliance, net of a variety of characteristics of the nursing home, the residents in the home, and the inspection team. The results show that blocked legitimate opportunity has a significant effect on regulatory compliance, as does the structure of illegitimate opportunity. There is also an effect on compliance of participation in business subcultures of resistance to regulation. Belief in laws increases compliance with those laws as does differential association with or attachment to the upholders of the law. Overall, however, control theory and differential association lack explanatory power, and the explanatory power of subcultural theory is modest. Only opportunity theory explains a credible proportion of variance in compliance as a standalone theory. The significant effect of some but not all of the measures for each theory, coupled with the lack of significant explanatory power by three of the four theories, suggests the need for theoretical integration.     

REINTEGRATIVE SHAMING AND COMPLIANCE WITH REGULATORY STANDARDS*

Australian nursing home inspection teams are partitioned into those with an enforcement ideology supportive of reintegrative shaming, those who believe in being tolerant and understanding when confronted with noncompliance with the law, and those with a more stigmatizing ideology toward noncompliers. Nursing homes visited by teams with a reintegrative shaming ideology display significantly improved compliance in the period following the inspection. Nursing homes visited by inspection teams with a more stigmatizing attitude toward noncompliance display an approximately equal drop in compliance. The performance of homes visited by tolerant and understanding inspection teams falls between these two extremes. A more specific test of the theory shows that when interdependency exists between the nursing home and the inspection team, reintegrative shaming has a stronger positive effect on improving compliance. In nursing homes with no link between the home and the inspection team, reintegrative shaming has no effect on compliance levels. These effects demonstrate both the importance and the limitations of reintegrative shaming as a theoretical concept worthy of further empirical investigation.     

Regulatory Styles,Motivational Postures and Nursing Home Compliance*

Using Kagan and Scholz (1984) typology of regulatory noncompliance, this study examined the perceptions of regulators and of regulatees toward the regulatory encounter to predict subsequent compliance with nursing home quality of care standards. Appraisals of both regulators and regulatees were not driven by motivational analyses of each other's actions, but rather by assessments of performance and social group identity. The regulators saw nursing homes in terms of one evaluative dimension ranging from responsible and not in need of intervention through to irresponsible and needing intervention. The corresponding reactions of nursing home managers involved seeing the regulators as cooperative and sympathetic through to police-like and coercive. On both sides of the regulatory encounter, criticism and reactions to criticism swamped nuanced analyses of motivational underpinnings and rational decision models in explaining compliance. The motivational complexity underlying the Kagan and Scholz typology was, however, apparent in the self-reported motivational postures of managers toward the regulatory process. The postures of managerial accommodation and capture to the regulatory culture were associated with compliance. Over time, resisters to the new regulatory regime became more compliant, particularly those whom inspectors judged as best left alone to adjust. In contrast were managers whose response to the regulatory process was disengagement. Their organizations experienced deterioration in compliance. The study fails to find that certain kinds of regulatory strategies such as deterrence, education and persuasion work better than others across the sample or with specific groups. Extant models focus excessively on how to play the regulatory game without recognizing the potential for players dropping out of the game. Understanding reasons for disengagement and processes for reengagement are fundamental to the application of behavioral decision theory models to the regulatory context.     

Consensus or dissensus about welfare in post-communist societies?

Abstract. The so-called 'third wave' of right-wing extremism has taken both society and social science by storm. In contrast to the many studies that look for possible explanations for the success of this 'wave', this article focusses on right-wing extremism itself. In the first part, the concept is defined on the basis of the existing literature, as a political ideology that consists of a combination of several features. In the second part, these features are first conceptualized and second used in a comparative analysis of the ideologies of three alleged right-wing extremist parties (the Dutch CP'86, the German NPD and the Austrian NDP). This analysis shows a more differentiated picture of the ideology of this 'party family', and is a warning against too careless generalisations.     

Having a say or getting your way? Political choice and satisfaction with democracy

Citizen satisfaction with democracy is greater when parties offer choices that are congruent with voter preferences. But are citizens content with simply having a party that represents their views or does their satisfaction depend on whether that party can also be instrumental in implementing policies? We argue that instrumentality moderates the effect of ideological congruence on democratic satisfaction. Combining an analysis of cross-national survey data with an experimental conjoint design, we find that citizens able to vote for a congruent party with a chance of entering government are more satisfied with democracy, whereas congruence without instrumentality has no such effect.     

DELINQUENCY,IDENTITY, AND WOMEN'S INVOLVEMENT IN RELATIONSHIP VIOLENCE*

This study focuses on factors associated with women's self-reports of relationship violence “perpetration.” We analyzed data derived from personal interviews with 942 respondents who were originally contacted when they were adolescents and then 10 years later as young adults (N=721). Level of delinquency in adolescence was a signicant predictor of adult reports of involvement in relationship violence, for both male and female respondents. In addition, women's scores on the Conflict Tactics scale were related to adolescent and adult identities-higher scores were found among women who reported that they had been viewed as troublemakers as adolescents and who endorsed statements indexing an angry self-concept in adulthood. Although male perpetration represents a much more serious social and public health problem, these data do suggest that there may be a social learning basis for female as well as male expressions of violence.