Differential Treatment and Communicative Interactions: Why the Character of Social Interaction is Important

Regulatory studies have traditionally focused on external political and administrative factors when explaining the behavior of regulatory inspectors. This is, however, only one part of the story about regulatory behavior. To understand the behavior of street-level bureaucrats such as regulatory inspectors, it is essential to look not only at external political and administrative factors but also at the very interaction between the bureaucrat and the client. By focusing on differential treatment of regulated firms by inspectors and the explanatory power of the interaction between inspector and firm, the article shows that variation in the level of communication between inspector and regulatee helps to explain variation in regulatory leniency. The higher the level of communication, the more lenient is the inspector.