The Politics of Detection in Business Regulation

Detecting noncompliant behaviors is an important step in the enforcement of regulations. The literature on the subject is vast yet also narrow in its approach, in the sense that it has built on the assumption that regulators would always want to maximize information quantity and quality, while acting under two fundamental constraints: the regulator’s resources and the information asymmetry between regulator and regulatee. This article argues that regulatory agencies might not always want to maximize information: rather, other bureaucratic goals and concerns might shape detection preferences and tools of detection in what might seem to be unexpected and irrational ways. To support this argument, the article presents a case study of the regulation of industrial risks in France, which focuses on the detection of incidents—small losses of control—taking place in high-hazard sites. The study presents a rich set of observations. It finds regulators sharing with regulatees a restrictive interpretation of incident reporting obligations. It identifies also a range of third party informants—employees—who have been neither solicited by regulators to contribute to detecting incidents, nor have been particularly well received by them when they have done so. The motives of regulators that can account for these detection preferences are mixed, but an overarching one appears to be their concerns for reputational risk. Seen through such a lens, certain types of incidents and certain tools for detecting them appeared either unimportant, or on the contrary as deserving attention and effort. On the basis of the case study and other empirical illustrations found in the literature, the article then offers a more general argument about how bureaucratic reputation may shape detection practices in business regulation.