Skip to main content Accessibility help
×
×
Home

Participation, Government Legitimacy, and Regulatory Compliance in Emerging Economies: A Firm-Level Field Experiment in Vietnam

  • EDMUND MALESKY (a1) and MARKUS TAUSSIG (a2)

Abstract

This paper employs a field experiment in single-party–ruled Vietnam to test whether providing a broad-based representative sample of firms the opportunity to comment on draft regulations increases their subsequent compliance. We find three main outcomes of this treatment. First, treated firms exhibited greater improvement in their views of government’s regulatory authority. Second, these firms were more likely to allow government-affiliated auditors to examine their factories. Third, treated firms demonstrated greater compliance on the factory floor. Access and compliance were not explained by the receipt of advance information about the regulation’s requirements, and none of the three outcomes required that firms offer substantive comments.

Copyright

Corresponding author

*Edmund Malesky, Professor, Political Science, Duke University, ejm5@duke.edu.
Markus Taussig, Associate Professor, Rutgers Business School, mtaussig@business.rutgers.edu.

Footnotes

Hide All

We are grateful to our terrific collaborators in Vietnam, especially our project manager Duong (Candice) Cam, the Legal Department at the Vietnam Chamber of Commerce and Industry’s Dau Anh Tuan and Ta Thanh Hoa, Mekong Development Research Institute’s Nguyen Viet Cuong, Phung Duc Tung, and Nguyen Thi Nhung, and the Ministry of Labor, Invalids and Social Affair’s Nguyen Anh Tho. Critical feedback on study design and post analysis was provided by Jim Anderson, Do Quoc Anh, Kate Baldwin, Sebastian Galiani, Georg Vanberg, Rema Hanna, Macartan Humphreys, Guy Grossman, Martin Kanz, Le Dang Doanh, Gerard Padro I Miguel, Dan Posner, Greg Huber, Nguyen Dinh Cung, and Pham Chi Lan. We are also thankful for additional valuable feedback from the editors and three reviewers, and for funding support for our field work from the Jameel Poverty Action Lab’s Governance Initiative, the UK’s DFID via the World Bank’s Vietnam country office, the Musim Mas Foundation, and NUS Business School.

Transparency: All experimental material including videos, scripts, and surveys as well as all datasets, replication code, and online appendix can be found on the APSR’s Dataverse: https://doi.org/10.7910/DVN/IANHOG. The pre-analysis plan for this experiment can be found at http://egap.org/registration/704. This experiment received IRB approval from National University of Singapore and Duke University on June 25, 2015 (CO469).

Footnotes

References

Hide All
Andreoni, James, Harbaugh, William, and Vesterlund, Lise. 2003. “The Carrot or the Stick: Rewards, Punishments, and Cooperation.” American Economic Review 93 (3): 893902.
Angrist, Joshua, Bettinger, Eric, and Kremer, Michael. 2006. “Long-Term Educational Consequences of Secondary School Vouchers: Evidence from Administrative Records in Colombia.” American Economic Review 96 (3): 847–62.
Ayres, Ian, and Braithwaite, John. 1992. Responsive Regulation: Transcending the Deregulation Debate. Oxford, UK: Oxford University Press.
Balla, Steven J. 2017. “Is Consultation the ‘New Normal?’ Online Policymaking and Governance Reform in China.” Journal of Chinese Political Science 22 (3): 375–92.
Balla, Steven J., and Liao, Zhou. 2013. “Online Consultation and Citizen Feedback in Chinese Policymaking.” Journal of Current Chinese Affairs 42 (3): 101–20.
Bardhan, Pranab K., and Mookherjee, Dilip. 2000. “Capture and Governance at Local and National Levels.” American Economic Review 90 (2): 135–9.
Baron, David P. 2000. Business and Its Environment. Upper Saddle River, New Jersey: Prentice Hall.
Bartels, Larry M. 2016. Unequal Democracy: The Political Economy of the New Gilded Age. Princeton, NJ: Princeton University Press.
BBC. 2013. “Bangladesh Factory Collapse Toll Passes 1,000.” May 10. Accessed November 9, 2017. https://www.bbc.com/news/world-asia-22476774.
Becker, Gary S., and Stigler, George J.. 1974. “Law Enforcement, Malfeasance, and Compensation of Enforcers.” The Journal of Legal Studies 3 (1): 118.
Bertrand, Marianne, and Kramarz, Francis. 2002. “Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry.” The Quarterly Journal of Economics 117 (4): 1369–413.
Bosse, Douglas A., and Phillips, Robert A.. 2016. “Agency Theory and Bounded Self-Interest.” Academy of Management Review 41 (2): 276–97.
Braithwaite, John, and Makkai, Toni. 1991. “Testing an Expected Utility Model of Corporate Deterrence.” Law & Society Review 25: 7.
Brammer, Stephen, Jackson, Gregory, and Matten, Dirk. 2012. “Corporate Social Responsibility and Institutional Theory: New Perspectives on Private Governance.” Socio-Economic Review 10 (1): 328.
Buchanan, James M., and Tullock, Gordon. 1975. “Polluters’ Profits and Political Response: Direct Controls versus Taxes.” The American Economic Review 65 (1): 139–47.
Carpenter, Daniel, and Moss, David A.. 2013. Preventing Regulatory Capture: Special Interest Influence and How to Limit It. New York: Cambridge University Press.
Carrigan, Christopher, and Coglianese, Cary. 2011. “The Politics of Regulation: From New Institutionalism to New Governance.” Annual Review of Political Science 14: 107–29.
Coglianese, Cary. 2006. “Citizen Participation in Rulemaking: Past, Present, and Future.” Duke Law Journal 55: 943–68.
Crouch, Colin, and Streeck, Wolfgang. 2006. The Diversity of Democracy: Corporatism, Social Order and Political Conflict. Cheltenham, UK: Edward Elgar Publishing.
Dal Bó, Pedro, Foster, Andrew, and Putterman, Louis. 2010. “Institutions and Behavior: Experimental Evidence on the Effects of Democracy.” American Economic Review 100 (5): 2205–29.
Dickson, Eric S., Gordon, Sanford C., and Huber, Gregory A.. 2015. “Institutional Sources of Legitimate Authority: An Experimental Investigation.” American Journal of Political Science 59 (1): 109–27.
Dickson, Eric S., Gordon, Sanford C., and Huber, Gregory A.. 2017. “Identifying Legitimacy: Experimental Evidence on Compliance with Authority.” Yale University: Working Paper. https://huber.research.yale.edu/materials/59_paper.pdf.
Djankov, Simeon, La Porta, Rafael, Lopez-de-Silanes, Florencio, and Shleifer, Andrei. 2002. “The Regulation of Entry.” The Quarterly Journal of Economics 117 (1): 137.
Doner, Richard F., and Schneider, Ben Ross. 2000. “Business Associations and Economic Development: Why Some Associations Contribute More than Others.” Business and Politics 2 (3): 261–88.
Dryzek, John S. 2000. Deliberative Democracy and beyond: Liberals, Critics, Contestations. New York: Oxford University Press on Demand.
Elster, Jon, ed. 1998. Deliberative Democracy. Cambridge, UK: Cambridge University Press.
Fearon, James D. 1998. “Deliberation as Discussion.” In Deliberative Democracy, ed. Elster, Jon. Cambridge, UK: Cambridge University Press, 4468.
Fehr, Ernst, Fischbacher, Urs, and Gächter, Simon. 2002. “Strong Reciprocity, Human Cooperation, and the Enforcement of Social Norms.” Human nature 13 (1): 125.
Fishkin, James S. 1991. Democracy and Deliberation: New Directions for Democratic Reform. New Haven, CT: Yale University Press.
Fishkin, James S., He, Baogang, Luskin, Robert C., and Siu, Alice. 2010. “Deliberative Democracy in an Unlikely Place: Deliberative Polling in China.” British Journal of Political Science 40 (02): 435–48.
Folger, Robert, and Konovsky, Mary A.. 1989. “Effects of Procedural and Distributive Justice on Reactions to Pay Raise Decisions.” Academy of Management Journal 32 (1): 115–30.
Fung, Archon, and Wright, Erik Olin. 2001. “Deepening Democracy: Innovations in Empowered Participatory Governance.” Politics & Society 29 (1): 541.
Gerschewski, Johannes. 2018. “Legitimacy in Autocracies: Oxymoron or Essential Feature?Perspectives on Politics 16 (3): 652–65.
Gilens, Martin, and Page, Benjamin I.. 2014. “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.” Perspectives on Politics 12 (3): 564–81.
Glaeser, Edward L., and Shleifer, Andrei. 2003. “The Rise of the Regulatory State.” Journal of Economic Literature 41 (2): 401–25.
Greenwood, Justin. 2017. Interest Representation in the European Union. London, UK: Macmillan International Higher Education.
Guriev, Sergei, and Treisman, Daniel. 2015. How Modern Dictators Survive: An Informational Theory of the New Authoritarianism. National Bureau of Economic Research. Cambridge, MA.
Hacker, Jacob S., and Pierson, Paul. 2014. “After the “Master Theory”: Downs, Schattschneider, and the Rebirth of Policy-Focused Analysis.” Perspectives on Politics 12 (3): 643–62.
He, Baogang, and Warren, Mark E.. 2011. “Authoritarian Deliberation: The Deliberative Turn in Chinese Political Development.” Perspectives on politics 9 (2): 269–89.
Hellman, Joel, and Kaufmann, Daniel. 2001. “Confronting the Challenge of State Capture in Transition Economies.” Finance and Development 38 (3): 31–5.
Hellman, Joel, and Schankerman, Mark. 2000. “Intervention, Corruption and Capture: The Nexus Between Enterprises and the State.” Economics of Transition 8 (3): 545–76.
Horsley, Jamie P. 2009. “Public Participation in the People’s Republic: Developing a More Participatory Governance Model in China.” Accessed November 9, 2017. https://law.yale.edu/system/files/documents/pdf/Intellectual_Life/CL-PP-PP_in_the__PRC_FINAL_91609.pdf.
Iacus, Stefano M., King, Gary, and Porro, Giuseppe. 2012. “Causal Inference without Balance Checking: Coarsened Exact Matching.” Political Analysis 20 (1): 124.
Isham, Jonathan, Narayan, Deepa, and Pritchett, Lant. 1995. “Does Participation Improve Performance? Establishing Causality with Subjective Data.” The World Bank Economic Review 9 (2): 175200.
Kolb, Alice Y., and Kolb, David A.. 2005. “Learning Styles and Learning Spaces: Enhancing Experiential Learning in Higher Education.” Academy of Management Learning and Education 4 (2): 193212.
Kreps, David M. 1996. “Corporate Culture and Economic Theory.” In Firms, Organizations and Contracts, eds. Buckley, Peter and Michie, Jonathan. Oxford, UK: Oxford University Press, 221–75.
Krueger, Anne O. 1974. “The Political Economy of the Rent-Seeking Society.” The American Economic Review 64 (3): 291303.
Kuran, Timur. 1997. Private Truths, Public Ties: The Social Consequences of Preference Falsification. Cambridge, MA: Harvard University Press.
Laffont, Jean-Jacques, and Tirole, Jean. 1991. “The Politics of Government Decision-Making: A Theory of Regulatory Capture.” The Quarterly Journal of Economics 106 (4): 1089–127.
Lall, Ranjit. 2015. “Timing as a Source of Regulatory Influence: A Technical Elite Network Analysis of Global Finance.” Regulation and Governance 9 (2): 125–43.
Leventhal, Gerald S. 1980. “What Should Be Done with Equity Theory? New Approaches to the Study of Fairness in Social Relationships.” In Social Exchange, eds. Gergen J., Kenneth, Greenberg S., Martin, and Richard Hartley, Willis. Boston, MA: Springer, 2755.
Lipset, Seymour Martin. 1960. Political Man: The Social Bases of Politics. Baltimore, MD: The Johns Hopkins University Press.
Mackie, Gerry. 2006. “Does Democratic Deliberation Change Minds?Politics, Philosophy & Economics 5 (3): 279303.
Malesky, Edmund J. 2016. The Vietnam Provincial Competitiveness Index: Measuring Economic Governance for Private Sector Development 2016. Hanoi, Vietnam: VCCI.
Malesky, Edmund, and Taussig, Markus. 2017. “The Danger of Not Listening to Firms: Government Responsiveness and the Goal of Regulatory Compliance.” Academy of Management Journal 60 (5): 1741–70.
Mansuri, Ghazala, and Rao, Vijayendra. 2012. Localizing Development: Does Participation Work? Washington, DC: The World Bank.
Marques, José Carlos, and Utting, Peter. 2010. “Introduction: Understanding Business Power and Public Policy in a Development Context.” In Business, Politics and Public Policy, eds. Marques, José Carlos and Utting, Peter. London, UK: Springer, 129.
Merchant, Nomaan. 2017. “China Investigates Former Local Party Boss for Bribery.” Associated Press, January 22, 2017. Accessed November 9, 2017. https://www.apnews.com/0c2f34cdb2ca4eb4a18bdf490fc6ce10.
Meunier, Sophie. 2003. “Trade Policy and Political Legitimacy in the European Union.” Comparative European Politics 1 (1): 6790.
MOLISA. 2016. National Programme on Occupational Safety and Health for the Period of 2016–2020. Hanoi, Vietnam: Department of Work Safety.
Moore, Mick, and Hamalai, Ladi. 1993. “Economic Liberalization, Political Pluralism and Business Associations in Developing Countries.” World Development 21 (12): 1895–912.
Morgenbesser, Lee. 2016. Behind the Façade: Elections under Authoritarianism in Southeast Asia. Albany, NY: SUNY Press.
Murphy, Kristina. 2005. “Regulating More Effectively: The Relationship Between Procedural Justice, Legitimacy, and Tax Non‐compliance.” Journal of law and Society 32 (4): 562–89.
Olson, Mary K. 1999. “Agency Rulemaking, Political Influences, Regulation, and Industry Compliance.” Journal of Law, Economics, and Organization 15 (3): 573601.
Parkinson, John. 2003. “Legitimacy Problems in Deliberative Democracy.” Political studies 51 (1): 180–96.
Pateman, Carole. 1970. Participation and Democratic Theory. New York: Cambridge University Press.
Peltzman, Sam. 1976. “Toward a More General Theory of Regulation.” The Journal of Law and Economics 19 (2): 211–40.
Phillips, Tom. 2015. “Tianjin Blast: More Warehouses Accused of Violating Rules on Toxic Materials.” The Guardian, August 19. Accessed November 9, 2017. https://www.theguardian.com/world/2015/aug/19/tianjin-blast-more-warehouses-accused-of-violating-rules-on-toxic-materials.
Pincus, Jonathan. 2015. “Why Doesn’t Vietnam Grow Faster? State Fragmentation and the Limits of Vent for Surplus Growth.” Journal of Southeast Asian Economies (JSEAE) 32 (1): 2651.
Pincus, Jonathan, Tu Anh, Vu Thanh, and Le Thuy, T. Tran. 2008. “Vietnam: A Tiger in Turmoil.” Far Eastern Economic Review 171 (4): 28.
Posner, Richard A. 1974. “Theories of Economic Regulation.” Bell Journal of Economics 5 (2): 335–58.
Posner, Richard A. 2013. “The Concept of Regulatory Capture: A Short, Inglorious History.” In Preventing Regulatory Capture: Special Interest Influence and How to Limit It., eds. Carpenter, Daniel and Moss, David A.. Cambridge: Cambridge University Press, 4956.
Sabatier, Paul A., and Jenkins-Smith, Hank C.. 1993. Policy Change and Learning: An Advocacy Coalition Approach. Boulder, CO: Westview Press.
Sappington, David E. M., and Stiglitz, Joseph E.. 1987. “Privatization, Information and Incentives.” Journal of policy analysis and management 6 (4): 567–85.
Scharpf, Fritz W. 1999. Governing in Europe: Effective and Democratic? Oxford, UK: Oxford University Press.
Shambaugh, David L., and Brinley, Joseph J.. 2008. China’s Communist Party: Atrophy and Adaptation. Oakland: University of California Press.
Stern, Marc J., Powell, Robert B., and Ardoin, Nicole M.. 2008. “What Difference Does it Make? Assessing Outcomes from Participation in a Residential Environmental Education Program.” The Journal of Environmental Education 39 (4): 3143.
Stigler, George J. 1971. “The Theory of Economic Regulation.” The Bell Journal of Economics and Management Science 2 (1): 321.
Stromseth, Jonathan R., Malesky, Edmund J., and Gueorguiev, Dimitar D.. 2017. China’s Governance Puzzle: Enabling Transparency and Participation in a Single-Party State. New York: Cambridge University Press.
Takala, Jukka, Hämäläinen, Päivi, Saarela, Kaija Leena, Yun, Loke Yoke, Manickam, Kathiresan, Jin, Tan Wee, Heng, Peggy, Tjong, Caleb, Kheng, Lim Guan, and Lim, Samuel. 2014. “Global Estimates of the Burden of Injury and Illness at Work in 2012.” Journal of Occupational and Environmental Hygiene 11 (5): 326–37.
Thibaut, John W., and Walker, Laurens. 1975. Procedural Justice: A Psychological Analysis. Hillsdale, NJ: Lawrence Erlbaum Associates.
Transparency International. 2017. “Corruption Perceptions Index 2017.” Accessed November 9, 2017. https://www.transparency.org/news/feature/corruption_perceptions_index_2017.
Truex, Rory. 2017. “Consultative Authoritarianism and its Limits.” Comparative Political Studies 50 (3): 329–61.
Tyler, Tom R. 1990. Why People Obey the Law. Princeton, NJ: Princeton University Press.
Tyler, Tom R. 2006. “Psychological Perspectives on Legitimacy and Legitimation.” Annual Review of Psychology 57: 375400.
VCCI. 2014. Study Report MEI 2014: Ministerial Efficiency Index on Performance in Business Law Development and Implementation in 2014. Hanoi, Vietnam: Hong Duc Publishing House. http://vibonline2.wecan-group.com/wp-content/uploads/2017/09/MEI2014-SUMMARY-EN.pdf.
Vietnamese General Statistics Office. Multiple Years. Vietnamese Statistical Handbook. Hanoi, Vietnam: Government Publishing House.
Walker, Edward T., and Rea, Christopher M.. 2014. “The Political Mobilization of Firms and Industries.” Annual Review of Sociology 40: 281304.
Weatherford, M. Stephen. 1992. “Measuring Political Legitimacy.” American Political Science Review 86 (1): 149–66.
Webb, Justin W., Tihanyi, Laszlo, Ireland, R. Duane, and Sirmon, David G.. 2009. “You Say Illegal, I Say Legitimate: Entrepreneurship in the Informal Economy.” Academy of Management Review 34 (3): 492510.
Weber, Max. (1922) 1978. Economy and Society: An Outline of Interpretive Sociology. Vol. 2, eds. Roth, Guenther and Wittich, Claus. Berkeley, CA: University of California Press.
Wilson, James Q. 1980. “The Politics of Regulation.” In The Political Economy: Readings in the Politics and Economics of American Public Policy, eds. Ferguson, Thomas and Rogers, Joel. New York: M. E. Sharpe, Inc.
Winter, Søren C., and May, Peter J.. 2001. “Motivation for Compliance with Environmental Regulations.” Journal of Policy Analysis and Management 20 (4): 675–98.
World Bank. 2017a. “World Development Indicators. Accessed November 9, 2017. https://data.worldbank.org/data-catalog/world-development-indicators.
World Bank. 2017b. World Development Report: Governance and Law. Washington, DC: World Bank Group.
World Economic Forum. 2017. “Competitiveness Rankings 2014–15.” Accessed November 9, 2017. http://reports.weforum.org/global-competitiveness-report-2014-2015/rankings/.
Yackee, Jason Webb, and Yackee, Susan Webb. 2006. “A Bias towards Business? Assessing Interest Group Influence on the US Bureaucracy.” The Journal of Politics 68 (1): 128–39.
Yackee, Susan Webb. 2005. “Sweet-Talking the Fourth Branch: The Influence of Interest Group Comments on Federal Agency Rulemaking.” Journal of Public Administration Research and Theory 16 (1): 103–24.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×
Type Description Title
UNKNOWN
Supplementary materials

Malesky and Taussig Dataset
Dataset

 Unknown
PDF
Supplementary materials

Malesky and Taussig supplementary material
Online Appendix

 PDF (1.5 MB)
1.5 MB

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed