Table 3.

Comparison of deterrence and compliance models of regulation

Feature	Deterrence	Compliance
Setting in which model most often found	Where regulator deals with a large number of small organisations, heterogeneous in nature, and with a strong business culture (private sector, competitive, profit maximising, risk taking, etc)	Where regulator deals with a small number of large organisations, homogeneous in nature, and with a strong ethical culture (public sector, professionalism, voluntarism, not for profit organisations, etc)
Regulator's view of regulated organisations	Amoral calculators, out to get all they can, untrustworthy	Mostly good and well intentioned, if not always competent
Regulated organisations' view of regulatory agency	Policeman, enforcer—feared and often respected, usually disliked	Consultant, supporter—not seen as a threat or problem, may be respected and liked
Temporal perspective	Retrospective (identify, investigate and deal with problems when they have happened)	Prospective (aim to prevent problems occurring through early intervention and support)
Use of regulatory standards and inspection	Many detailed and explicit written standards, often with statutory force; approach to inspection and enforcement highly focused on standards	May have detailed written standards and policies often accompanied by guidance on implementation; standards play a less prominent part in interactions with regulated organisations
Enforcement, and use of sanctions or penalties	Part of routine practice, valued for deterring penalised and other regulated organisations	Seen as the last resort, used only when persuasion exhausted
Provision of advice and support to regulated organisations	Not part of the regulator's role—seen as risking regulatory capture and having conflict of interest with policing and punishing role	Essential part of regulator's role—valued as opportunity to understand, build cooperative relationships, and influence performance
Relationship between regulator and regulated organisations	Distant, formal, and adversarial	Close, friendly, and cooperative
Costs of regulation	High cost to regulator and regulated organisations in inspection and enforcement	Lower costs, particularly in inspection and enforcement, though costs to regulator of providing advice and support to regulated organisations can be higher
Likely advantages	Regulated organisations pay attention to regulator, take it seriously, and respond readily to its initiatives	Regulators and regulated organisations work together on improvement and collaborate effectively; costs of regulation are minimised
Likely disadvantages	Creative compliance, resistance, and lobbying by regulated organisations are likely to subvert purpose of regulation. Very high costs associated with sustained inspection and enforcement	Regulation may lack teeth and may be seen as weak, with limited ability to make unwelcome changes happen in regulated organisations. Regulator may be seen as too close to or allied with the organisations it regulates