Scholar urges policymakers to adopt voluntary programs when mandatory regulation falls short.
Last year, congressional representatives introduced legislation that would codify into federal law an existing safety program that offers fewer government inspections to employers that adopt voluntary workplace safety and health standards. Permanent authorization would prevent any future administration from eliminating or defunding the program, which currently covers one million workers nationwide.
This example reflects the growing endorsement of voluntary regulations—government initiatives that guide behavior through persuasion rather than mandates—among legislatures and regulators to address social and economic challenges. Despite an increase in voluntary programs, scholars have noted that policymakers lack consensus on when voluntary regulation is most promising.
In a recent article, Luis Inaraja Vera argues that policymakers should consider voluntary regulation when mandatory approaches are not politically viable, are difficult to enforce, or raise litigation risks. He contends that voluntary regulation can be valuable even when it does not operate alongside mandatory programs.
Inaraja Vera explains that voluntary regulation is a tool that policymakers—both legislatures and administrative agencies—can use to influence behavior in a non-coercive manner. Agencies may introduce only voluntary regulation that falls within their existing legal authority, just as they must do for mandatory regulation.
Voluntary regulation nonetheless differs from mandatory regulation in two respects, Inaraja Vera stresses. First, individuals and firms can decide whether to participate. Second, regulatory agencies provide incentives, such as grants, tax credits, and loans, to encourage eligible parties to enter voluntary programs.
Inaraja Vera explains that policymakers have introduced extensive voluntary regulation to promote environmental protection. Under the Farm Bill, for example, the U.S. Congress enables federal agencies to implement voluntary programs that promote conservation of agricultural land. State legislatures have authorized environmental agencies to adopt cleanup programs, which provide monetary incentives to owners of contaminated property for their participation in cleanup efforts.
He next identifies three general instances in which legislatures should consider authorizing, and regulators should consider pursuing, voluntary regulation.
First, policymakers should contemplate voluntary initiatives when mandatory alternatives lack political support, Inaraja Vera urges. Sometimes regulated industries can exert enough pressure to prevent legislation that would enable mandatory regulation. At other times, legislation enabling mandatory regulation may become law, but regulated industries may convince agencies to weaken proposed regulations by including significant exceptions or carve-outs in final regulations.
Inaraja Vera contends that, when political pressure prevents mandatory regulation, voluntary regulation can help policymakers target social problems. He underscores that interest groups do not usually resist voluntary programs, because these programs offer incentives instead of imposing costs on those regulated. Inaraja Vera notes that with less political opposition, legislators can pass legislation authorizing voluntary regulation, and regulators can develop programs with minimal industry pressure.
Second, Inaraja Vera argues that policymakers should prioritize voluntary approaches when mandatory regulation is impractical to enforce. In some instances, regulators lack sufficient information to administer mandatory initiatives properly. For example, state agencies often lack information on contamination and resources to investigate or prosecute polluting property owners. Voluntary cleanup programs, by contrast, create incentives for property owners to come forward and clean up contaminated land that regulators might not identify otherwise.
Finally, agency regulators and legislators should explore voluntary initiatives when they foresee litigation risks with mandatory programs, Inaraja Vera suggests. Organizations or individuals may challenge in court an agency’s authority to issue mandatory rules, he observes. Individuals or groups may also claim that rules limiting how they can use property infringe on their constitutionally protected property rights. Inaraja Vera underscores that if a legal challenge succeeds, an agency may have to revoke its regulation. Even if a challenge fails, agencies often must pause implementation of rules during lawsuits.
According to Inaraja Vera, voluntary regulation reduces litigation risk. Individuals or groups are less likely to challenge agency authority to issue a voluntary regulation, since they can avoid entering the voluntary program. And even if challengers file suit, they are unlikely to succeed on constitutional claims, since agencies impose property limitations only on owners who agree to program requirements. Inaraja Vera contends that with reduced litigation risk, agencies can devote fewer resources to defending regulations and more resources to implementing them.
Inaraja Vera then counters a view that some regulatory scholars hold—that voluntary regulation is useful only when it operates against the backdrop of existing or forthcoming mandatory regulation. Although policymakers may target complex problems by using both voluntary and mandatory regulation, Inaraja Vera argues that when mandatory regulation is impractical, policymakers should often prioritize standalone voluntary programs over inaction. Voluntary initiatives, he maintains, can generate benefits that would not arise without government intervention, including encouraging socially desirable practices and saving lives.
Voluntary initiatives are becoming a central part of the regulatory landscape, Inaraja Vera stresses. He concludes that if policymakers adopt voluntary programs in the instances he advocates, they can target complex problems even when mandatory regulation is unattainable.
