Can Government Facilitate Cooperation? An Informational Model of OSHA Enforcement

Abstract

Theory: Government can facilitate cooperation between private parties in collective action dilemmas. Regulatory agencies provide a bargaining arena to establish common expectations, and enforcement activities aid in monitoring cooperative agreements. Hypotheses: We compare two enforcement models of the impact of OSHA inspections on workplace safety. The deterrence model assumes that enforcement rests on coercion, so only inspections imposing sanctions should reduce injuries in inspected plants. The collective action model assumes that enforcement can also facilitate cooperation by providing information, so complaint inspections that signal worker mistrust can decrease injuries even without sanctions. Methods: We test the impact of OSHA inspections on injury rates at 6,842 plants during 1979-85, using maximum likelihood regression analysis to analyze the panel data. Results: Inspections initiated by workers reduce injuries regardless of penalty, suggesting that information rather than coercion is the critical factor in complaint inspections. Regular inspections reduce injuries only when penalties are imposed, which is consistent with both models. We conclude that both coercive and facilitative models are needed to understand regulatory behavior.