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Self-Regulation by Associations: Collective Action Problems in European Environmental Regulation

Published online by Cambridge University Press:  20 January 2017

Adrienne Héritier  and
Sandra Eckert
Adrienne Héritier
Affiliation:
European University Institute
Sandra Eckert
Affiliation:
Free University Berlin
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Abstract

How and to what effect do firms coordinate their actions to deal with the negative external effects of productive activity? Under which conditions do associations engage in self-regulation and how do they tackle the specific regulatory challenges at stake? When developing hypotheses, we first vary attributes of the information environment in which private actors interact; and, secondly, actors' preferences as a function of the problem type at hand. With respect to the environmental conditions, our findings show that a regulatory threat matters when developing associative action, whilst the evidence is less clear as regards NGO campaigns. In terms of the problem type, we find that redistributive issues and prisoner's dilemma situations are much more conflict prone than coordination/win-win type of problems. Industry actors recur to various governance devices such as flexible contract design and compensation mechanisms to solve redistributive problems. Prisoner's dilemma (PD) problems may only partially be addressed by governance devices to the extent that free-riding is controlled and sanctioned within an association. We conclude that private actors engaging in self-regulation will not successfully manage all types of conflicts. They lack powerful sanctioning tools to deal with PD situations, but prove to be able to flexibly handle redistributive problems.

Keywords

collective actiongovernanceregulatory threatself-regulationtransaction cost theory
Type
Article
Information
Business and Politics , Volume 11 , Issue 1 , April 2009 , pp. 1 - 22
Copyright
Copyright © V.K. Aggarwal 2009 and published under exclusive license to Cambridge University Press 

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