Institutional Choice and Social Regulation: The Case of Environmental and Occupational Health Standards

Majone, G. (1981). Institutional Choice and Social Regulation: The Case of Environmental and Occupational Health Standards. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-81-041

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Abstract

The institutional approach to policy analysis rests on the simple but important insight that individuals and groups pursue their goals in the policy arena not only by acting within the constraints set by the given institutional framework, but also by attempting to modify those constraints in their favor. The implications of this extension of the traditional model of rational choice, in which institutions are defined exogenously, are far-reaching. Policies which seem superior when judged by criteria relevant to the traditional approach, lose much of their attractiveness in the extended model.

In this paper I analyze some recent attempts to control environmental and occupational hazards in the United States and elsewhere. The purpose of the analysis is twofold. First, to show the importance of institution-changing strategies in the formation of regulatory policy. Second, to argue that the usual dichotomy of regulation versus deregulation or, more specifically, "standards" versus "price solutions", is a spurious one -- an artifact, as it were, of the restricted model of social choice implicit in most policy analyses.

The fact that health standards are unsatisfactory tools of public policy does not prove that market solutions are necessarily superior in terms of criteria which are acceptable to the policy actors themselves. In fact, the suggestion that economic efficiency should be the basic criterion in choosing among policy alternatives exemplifies a particular type of effort aimed at institutional change -- change in societal values.

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