How regulators’ moral-procedural reputation contributes to regulatee compliance with open norms.

The reputation of regulatory agencies has been theorized to influence the compliance behavior of regulated organizations, yet empirical evidence remains limited. Therefore, we examine how the moral-procedural reputation of regulators contributes to regulatee compliance with open norms. While the flexibility that open norms provide can help to address complex and dynamic regulatory challenges, this also introduces uncertainty and unpredictability for regulatees. In such contexts, we expect regulatees to rely on regulators’ moral-procedural reputation to guide their compliance decisions. In order to empirically examine this, we conduct a fuzzy-set qualitative comparative analysis (fsQCA) of 16 cases from Dutch regulatory practice. The other conditions that we include, besides strong moral-procedural regulator reputation, are absence of punitive regulatory intervention, economically sustainable regulation, and stakeholder pressure on regulatee. We find that having a strong moral-procedural reputation is essential for regulators to secure regulatee compliance with open norms, as it underwrites persuasion and legitimizes punitiveness.