The role of incentives, regulation, and nudges in influencing compliance behaviour of marine resource users.

Project Outline and objectives:

Understanding compliance behaviour of commercial and recreational fishers has been a topic of research for some time. Understanding compliance is important because if a failure to comply occurs at sufficiently high levels it may affect the environmental sustainability of the resource. The impacts of non-compliance on marine resources occurs in many different management situations including highly regulated, cooperatively managed, self regulated, or guided by guidelines only. Compliance in the marine environment is no longer exclusively concerned with the extractive activities of fishers but it is a multi sectoral problem and includes, for instance, tourists and tourism operators, transport, industrial users (oil & gas, renewable) and aquaculture.

Economic assessments of compliance tend to assume rational economic behaviour. In this type of economic assessment the decision to infringe or break the rules is based on the expected return, taking into account the direct returns and costs of different behaviours, and the risk of detection and punishment. However, if everyone behaved rationally this would suggest that there should be high levels cheating on, for instance, declaring taxes. After all, the likelihood of getting caught is low but payoff can be very high.
Similarly in the context of marine resources, compliance behaviour may also not be as expected from simply weighing the payoff against the probability of being caught. The difference between expected marine resource user compliance (in terms of classical economics) and what is observed in reality may be a measure of (lack of – or high) social capital.

Measuring actual non-compliance is not easy as there are strong incentives to keep actual behaviour a secret. It is not at all clear that people will reveal their real behaviour or even their preferences in hypothetical situations. However, where observational studies have measured compliance (particularly in fisheries research) a number of studies have outlined that rational economic principles do in fact explain compliance decisions but importantly, that normative and social factors also explain compliance. Perceived legitimacy of regulations, the norms to which fishers respond with respect to illegal action, or the perceived behaviour and response of peers also explain compliance behaviour.

There are departures from “rational behaviour” revealed by behavioural economics and previous fisheries specific studies have illustrated that compliance can also be explained by culture, norms and social factors. This study builds on previous fisheries work but focuses beyond fisheries to include the other marine sectors mentioned above. This study will not identify a new class of non-rational phenomena (or behaviour) but instead focus on analysing if and why different marine resource users are not behaving “rationally” in terms of compliance. The primary aim is to inform the debate around policy on compliance, and resource management more generally.

Given the extant knowledge around departures from rational behaviour and all that has been learned from behavioural economics –this project will identify potential incentives for compliance behaviour and understand how policies can be best adjusted. In identifying incentives, the interactions between traditional incentive and regulatory based management and nudges are of particular interest. Nudges are different from traditional incentives in that they appeal to motivations of human behaviour other than material rewards and costs. Nudges modify the context in which decisions are made to change behaviour (for instance by framing the choice differently). Changing behaviour by nudging may be a costs effective way of achieving marine user compliance which may be useful if enforcement of traditional economic incentives and regulations is high.

Overall the study will consider social, psychological and economic explanations of behaviour and choices around compliance in the marine environment. The study will use this knowledge to investigate the role of incentives, regulation, and nudges in influencing compliance behaviour of marine resource users. The best mix of traditional incentives, regulations, and nudges will be linked to the broader context: the resource use (including property rights characteristics), the users, the resource, and the risk.

The objectives of the project are to:

1. Determine the compliance aspects/problems of different marine uses
2. Estimate expected compliance of marine uses and users (using an experimental approach)
3. Assess actual compliance (based on revealed preferences study or a proxy observational measure)
4. Assess differences and model expected and actual compliance behaviour and determine if social, behavioural economics (psychological) or economic explanations can be found
5. Determine a mix of traditional incentives, regulations and nudges to achieve optimal compliance for the different marine uses and users
6. Develop a set of policy options to help achieve desirable levels of compliance behaviour

Phd Student
Mary MacKay

Ingrid van Putten
Sarah Jennings, UTas
Sean Pascoe, CSIRO
Hugh Sibly, UTas


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