The usual economic analysis of enforcement in any economic activities, assumes that people act in all circumstances as self-interested rational agents. Given a choice of alternative actions, firms will seek to maximize profits and individuals will seek to maximize their utility in monetary terms, and the illegality of an action is only reflected in its expected cost. The shortcoming of this assumption is that not all people may want to violate the regulation, even though it is financially profitable to do so. The role of moral and social norms, as well as instrumental factors such as social pressure, in shaping individual behavior is examined extensively in the sociology and social psychology literature. These factors, in addition to threats of sanctions, are recognized as important in determining individuals’ compliance decisions.
A large number of survey studies has been conducted to test the economic model of criminal behavior as originally formulated by Becker (1968). Jamal Ali (2005) used deterrence theory to conduct an econometric study of regulatory enforcement and compliance in the commercial fishermen in Peninsular Malaysia. He set five testable hypotheses, namely: (1) fishermen who were more income-dependent have a stronger conservation motive and were more likely to comply with conservation and management regulations; (2) fishermen with more years in the fishery were more likely to perceive and appreciate the long-term benefits of conservation and management measures, and were more likely to comply with regulations; (3) younger fishermen faced greater financial pressure and were more likely to violate regulations to realize short-term gains; (4) fishermen with relatives in the fishery have a greater interest in the long-term health of fishery and were less likely to violate regulations; and (5) frequent violators tend to remain in the fishery for short-term gains only.
The model used by the researcher assumed that violation rates were a function of probabilities of detection and conviction, level of economic gains from violation activity and variables reflecting people’s commitment to the fishery. In that study, he used both Positive Theory (Deterrence Theory) and Normative Theory (Social Influence and Cognitive Theory) to estimate a compliance model. He noted that, in practice, the costs of enforcing fisheries regulations was high, result in relatively low probabilities of detection, but penalties were not usually sufficiently high to produce a deterrent effect. Despite this, the author observed that a high proportion of people complied with regulations. This led him to look for other factors explaining individual compliance behavior. The researcher developed an extended model that, alongside monetary incentives, included variables such as “moral obligation” and “social influence”. In his model, moral obligation included variables related to moral norms, as well as the perceived legitimacy of the regulator and the regulations.
His study showed that income potential plays a major role in the compliance decisions of fishermen. When the difference in the catch per unit effort between the zones becomes more pronounced, the incentive for the fishermen to violate the zoning regulation increases. The researcher also found that moral development and social influences factors were statistically significant in explaining compliance behavior in the normative model.