Calling all volunteers: industry self-regulation on the environment

Since the 1980s, there has been an increased interest in governance with government rather than governance by government. This chapter explicates the diffusion and performance of voluntary programs and related policy tools that fall under self-regulation and voluntarism, all of which encourage the private sector to engage in beyond-compliance actions without the force of law. Why won’t all firms join voluntary programs? Firms engage in self-regulation to gain improved stakeholder and regulatory relations today with the aim of receiving preferential treatment tomorrow. Favorable internal firm-level management structures and practices, such as dedicated managers and complementary assets, also motivate self-regulation. When voluntary programs are designed with institutional capacity for program monitoring and enforcement, participants are less likely to engage in free-riding behavior. By this metric, the majority of voluntary programs falls short of the necessary program design features for maximizing their effectiveness. The chapter ends by identifying future research opportunities.