Formal and informal enforcement of renewable resource use
CEES Extra seminar by Linda Nøstebakken
I study resource use and compliance in a dynamic model with both informal and formal modes of enforcement. Agents obtain utility from both resource use and from behaving according to a norm of quota compliance. The users can exceed their quota at the risk of being detected and formally punished, but they also risk informal sanctions in the form of social disapproval and guilt. I find that when accounting for informal enforcement, there is an indirect effect of regulatory change in addition to the intended direct effect. When policy change, such as tougher enforcement, makes individuals more compliant, the norm of compliance is gradually strengthened, which in turn induces more compliant behavior.
Alberta School of Business
University of Alberta