Keeping demands within desirable limits of body function and perception. Ensuring that critical information for use is easily perceived. Making methods of operation and use intuitive, clear, and unambiguous. Contributing to health promotion, avoidance of disease, and protection from hazards.

Social Integration. Incorporating opportunities for choice and the expression of individual preferences. One interviewee told us about a fine he had received during a safety inspection. He clearly thought the fine was unreasonable and there was no question from his tone and his subsequent comments that the incident had a disproportionate effect on his attitude toward regulators and regulations.

Another small business owner told us a similar story. Forty years ago he had been sued by a worker he had fired. The worker claimed that he had been fired because he had been hurt on the job a claim vigorously denied by my interview subject. The court gave an award to the worker.

The business owner that was able to recount the details of the case 40 years later and it shaped his attitudes toward government. He was probably the most anti-regulatory of our eight interview subjects.

Incidents did not have to happen to the business itself for it to affect owners. At least two other interview subjects again unprompted described incidents that they had heard about from competitors or neighbors where there was treatment by the government that was perceived to be unfair.

These incidents were part of what formed their attitudes toward government regulation and government enforcement of that regulation.

This is consistent with blame-assignation in other contexts Davis and Pink-Harper, Obviously, some of the actions by government may not have been unfair.

There is no way to judge the case of the year-old workers compensation claim, and the incidents in neighboring businesses are even murkier since they were filtered through two retellings.

And it is indeed possible perhaps probable that these owners were already disposed to be opposed to government regulation before the incident happened or they heard about it. It was clear from our interviews that this phenomenon is prevalent in the regulatory arena.

You could ship anything anywhere. It is also possible to see this type of anchoring interacting with the bandwagon effect described above.

In the Internet era, when anyone is upset about unfair treatment, the first thing they do is go on the Internet looking for advice or sympathy.

This will likely result in finding support for anti-regulatory attitudes and other examples of purported governmental overreach. One will also listen with more sympathy when political figures decry over-regulation if you perceive yourself to have been the victim of such phenomena.

You know that noncompliance penalties can be unbelievably severe, so you worry about that constantly. Business owners had varying perceptions of the state of the economy in Responses to the question on the state of the economy correlated strongly with the main questions designed to measure perceptions about regulations.

Mood effects are prominent in both the behavioral economics literature and the organizational behavior literature Wright and Bower, If a business owner or manager believes the economy is bad or is just concerned about the future of their business it is likely to impact their attitude toward anything that has a negative impact on their financial welfare, including regulations.

Similarly, research in organizational behavior has shown that individuals with negative work experiences tend to blame organizational red tape Davis and Pink-Harper, A similar behavior may explain negative attitudes toward government regulation.

When a business fails or does poorly the owner of the business must ascribe the failure or poor performance to some cause or combination of causes. Research on self-serving biases point toward business owners finding external causes for their misfortune Pronin and Schmidt, Of course, external causes may be at fault for a business failure.

A poor economy could be to blame as could the opening of a competitive business with a new technology or particularly desirable product. Or it could be government regulation that is at fault.

What the literature on self-serving bias points to though is that in apportioning blame for failure, the business owner will overemphasize external factors and underemphasize her own role.

The bandwagon effect described above makes regulation an even more attractive external source of blame. While the businesses interviewed had records of success and there were no questions specifically asking about the causes of setbacks, at least one business owner blamed the government particularly Democrats for the tough times during the Great Recession.

Bombarded by rhetoric about government regulation, anyone searching for people to blame for poor outcomes in their business has an easy target.

Some of the interviewees demonstrated that disclosure requirements often fail to take into account human nature. The owner with the binders on his desk was not the only one with a visual aid. These walls were filled with mandatory notices to their workers about worker safety, worker rights, and other required disclosures.

The owners did not need to say anything to make their points. Seeing these walls for the first time, I barely had any inclination to read what they said. If you pass such a wall every day, you are even less likely to pay attention to what is on it or to notice any new disclosures if one sees such disclosures as intended to solely inform union representatives of their rights, then their applicability to the average worker may be less important.

Several businesses also cited new OSHA regulations on the disclosure of chemical hazards. Footnote 8 They described the relabeling as burdensome but more importantly questioned the benefits of such a regulation. It is entirely possible that workers at these facilities would have a different perspective on the use of these pictograms but the owners did not seem to think that their employees paid much attention to them.

This is not to demean all disclosure requirements Sunstein, , p. He also argues p. That is a lot of requirements for a disclosure to meet. And our research suggests that the list is good but incomplete. More attention should be paid to how disclosure requirements are implemented, how multiple disclosures targeted at the same audience interact with each other, and whether the effect of disclosures diminish over time.

The disclosures at the workplaces of interview subjects may not meet the basic criteria for success of an information disclosure that the beneficiaries should receive and understand the information Carrigan and Coglianese, because of a failure to incorporate these additional factors. Behavioral economics has become a considerable focus in public policy over the past decade.

Spurred on by Nobel Prize winners Daniel Kahneman and Richard Thaler and such proponents as Cass Sunstein, it has prompted significant changes in policy on both sides of the Atlantic.

This is particularly true in regulatory policy. One area of regulation that behavioralists have neglected is the response to regulations of those charged with complying with them, not to benefit themselves but to benefit others.

With billions of dollars of regulatory costs and benefits at stake, this is a potentially critical area for further research. Furthermore, the behavioral response to regulation shapes attitudes toward government more generally. In a time of increasing political polarization, how businesses interpret regulatory requirements both impacts their political attitudes and is in turn impacted by them.

A vicious cycle ensues where bad experiences with regulation are reinforced by anti-regulatory jeremiads on the Internet which then shape how future experiences with regulation are perceived.

More research is needed on mapping the existing lists of heuristics and biases on to behaviors by business owners. There are many possible hypotheses that could follow from this work. The difference between small and large businesses is likely to be important as the one representative of a large business had very different reactions to regulation see Rinfret and Pautz for broader examples of this phenomenon.

Do heuristics affect the regulatory behavior and attitudes of small businesses more than large businesses? Do the heuristics play out differently in non-manufacturing sectors than in manufacturing where the mood effect may be particularly prominent? Do these heuristics operate differently in non-business regulated communities?

In the shorter run, this study provides support for reforms that others have argued for. Thaler suggests using government policy to reduce the risk associated with starting a small business. This would have the twin advantages of dealing with loss aversion of small business owners, Footnote 9 and giving small businesses a positive interaction with government on which to anchor their sentiments about the state.

In addition, Viscusi and Gayer suggest applying behavioral insights to regulators. They cite many of the same biases discussed here as playing out in the behavior of regulators. While their context is largely the choice federal agencies face in crafting rules, our findings indicate that their arguments also apply to the enforcement of those rules.

Training of street level enforcers of regulations to combat the biases that lead to citations for small offenses and inculcating a culture of fear of the government in the regulated community could make a significant difference both in compliance and in the attitude of the regulated.

While violations that clearly causes harm should be strictly prosecuted, incidents like a missing line on a form should be handled with care. A business punished for a paperwork violation will remember it for a long time. Our finding that business owners were frustrated by a lack of understanding regarding the purpose of regulation points out that this distinction could also be applied to rules imposed on the private sector.

The interviews also point to the value of compliance assistance and explaining the purposes of regulation. This is one of the few reforms that could make a difference both to the actual burden experienced by businesses and to their perception of regulations. Compliance assistance is already practiced by federal and state regulatory agencies, but our experience indicates that there is a considerable demand for more as long as such assistance does not come with the threat of enforcement from businesses.

A greater presence of government as a genuine partner in the effort to improve workplace safety, public health, and general welfare would go a long way to changing perceptions of regulation. Finally, retrospective review of regulations has been a very prominent part of regulatory debates in recent years.

This generally involves selecting regulations that have been in place for a number of years and determining whether they are fulfilling their purpose, and estimating the burdens they are imposing.

Initiatives for retrospective review should explicitly focus on reporting and record-keeping requirements as they impose continual costs on businesses.

They could even be incorporated in a revised Paperwork Reduction Act that focuses on the cumulative burden of reporting and recordkeeping requirements Shapiro, Thus, well intentioned interventions can fail because of the way they are construed by the targeted group Shafir, , p.

Debates over regulation have become deeply polarized over the past decade. As a result, many of the debates in regulatory policy involve the two sides talking past each other which in turn amplifies the polarization. A better understanding of why businesses react to regulation the way they do may hold the promise of turning down the temperature on these debates and perhaps even allowing us to make better regulatory policy.

Individual interview transcripts have not been shared because to do so would violate our Rutgers Institutional Review Board approval. Indeed, we did do one interview with someone in the environmental office of a large business to test this premise and he bore out the assumption that large businesses see regulation as part of their business and use offices dedicated to compliance to manage their regulatory responses.

This is consistent with arguments that large businesses view regulation differently than small businesses Rinfret and Pautz, We use these regulations to show that we are reducing emissions. html for example last viewed October 12, Two of these statement pairs were adapted from an earlier survey by the Pew Research Center.

This may also indicate another phenomenon discussed in the behavioral literature, the role of social norms. If businesses are discussing the unfairness of regulations with each other, their beliefs about this unfairness becomes more justified in their minds Sunstein, html last viewed November 20, While we did not see loss aversion explicitly in our interview subjects, there is reason to believe that because regulations are always a loss for businesses, that loss aversion is a part of the naturally occurring bias against regulations from owners and managers.

Adams JS Toward an understanding of inequity. J Abnormal Soc Psychol — Article CAS Google Scholar. Alemanno A, Spina A Nudging legally: on the checks and balances of behavioral regulation. Int J Const Law 12 2 — Google Scholar.

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Babcock L, Loewenstein G, Issacharoff S, Camerer C Biased judgments of fairness in bargaining. Am Econ Rev 85 5 — Bardach E, Kagan RA Going by the book: the problem of regulatory unreasonableness.

Transaction Publishers. Bernheim BD, Rangel A Beyond revealed preference: choice-theoretic foundations for behavioral welfare economics.

Q J Econ 1 — Article Google Scholar. Bozeman B, Anderson DM Public policy and the origins of bureaucratic red tape: implications of the Stanford Yacht Scandal. Adm Soc 48 6 — Carrigan C, Coglianese C Nudges as regulatory tools. Presented at behavioral public administration symposium, George Washington University, May 24, Cooper JC, Kovacic WE Behavioral economics: implications for regulatory behavior.

J Regul Econ 41 1 — Cramer K The politics of resentment. University of Chicago Press, Chicago. Davis RS, Pink-Harper SA Connecting knowledge of rule-breaking and perceived red tape: how behavioral attribution influences red tape perceptions.

Public Perform Manag Rev 40 1 — DeHart-Davis L Green tape: a theory of effective organizational rules. J Public Adm Res Theory 19 2 — de Fine Licht J Policy area as a potential moderator of transparency effects: an experiment. Public Adm Rev 74 3 — Dennis Jr WJ Entrepreneurship, small business and public policy levers.

J Small Bus Manag 49 2 — Dhami S, al-Nowaihi A, Sunstein CR Heuristics and public policy: Decision-making under bounded rationality. Stud Microeconomics 7 1 :7— Grimmelikhuijsen S, Jilke S, Olsen AL, Tummers L Behavioral public administration: Combining insights from public administration and psychology.

Public Administration Review 77 1 — Hattke F, Hensel D, Kalucza J, Muhlbach C, Znanewitz J Emotional responses to bureaucratic red tape. Organ Env 19 1 — Law Policy 30 1 — Kagan RA, Gunningham N, Thornton D Explaining corporate environmental performance: how does regulation matter?

Law Soc Rev 37 1 — In: Hawkins K, Thomas J eds Enforcing regulation. Kluwer Nijoff Publishing, Boston. Kahneman D Thinking, fast and slow. Kasdan DO Toward a theory of behavioral public administration. Int Rev Adm Sci 1— Kaufmann W, Tummers L The negative effect of red tape on procedural satisfaction.

Public Manag Rev 19 9 — Livermore MA, Schwartz JA Analysis to inform public discourse on jobs and regulation. In: Coglianese C, Finkel A, Carrigan C eds Does regulation kill jobs.

Makkai T, Braithwaite J Procedural justice and regulatory compliance. Law Hum Behav 20 1 Mandel M, Carew DG Regulatory improvement commission: a politically-viable approach to US regulatory reform. Progressive Policy Institute. Mendeloff J The dilemma of toxic substance regulation: how overregulation causes underregulation at OSHA, vol MIT Press.

Moynihan D, Herd P, Harvey H Administrative burden: learning, psychological, and compliance costs in citizen-state interactions. J Public Adm Res Theory 25 1 — Parker C, Nielsen VL eds Explaining compliance: business responses to regulation.

Edward Elgar Publishing. At this stage in the process, you may just want to determine which category of action you want to pursue, or you may want to select specific actions.

In any case, be all-inclusive as you brainstorm. You will narrow your options in Steps 5 and 6. As you brainstorm actions, reach out to stakeholders, including expert advisors and the general public, for ideas.

Local academics, business leaders, and the general community can be sources of creative ideas. If you choose to gather their input, be careful not to promise that you will implement all suggestions.

In addition to consulting stakeholders, refer to the following resources for ideas:. Keep a list of potential actions and the goals they can help achieve. From there, you can evaluate the options and decide which to pursue. If the initial list of strategies or avenues to pursue is too long, begin systematically reviewing the options to rule out those which might not be appropriate to pursue in the near term.

Depending on the number of strategies you want to evaluate, you may do this in two steps:. First, do an initial screen of the actions identified based on key criteria, such as their general benefits and costs or pros and cons ; technical, economic, and political feasibility; and alignment with community goals.

There may be helpful information for this qualitative evaluation from the same sources where you identified the action. You can also use professional judgment to identify which policies are likely to be the most cost-effective and have the broadest community support.

Choose a limited number of criteria to consider at this stage. This screen could be conducted internally or in coordination with stakeholders, through community meetings, by using a website to collect feedback or votes, or by using a charrette-style exercise for collaborative screening.

Note that if the success of your selected actions depends on community involvement, it is especially important that you involve the community in the selection and development process to establish community support early.

It is also typically a good idea to gather input from the entity that would be tasked with implementing the actions, as they are likely to have informed ideas about what actions may be feasible.

This high-level screen may be sufficient to move on to implementation. However, you may want to conduct a more detailed, quantitative evaluation. Consider creating a matrix to help with the action screening process. For example, set up each action as a row and each criterion as a column, then assign a qualitative ranking e.

You can color-code and filter the responses to see which actions to eliminate or describe as low priority, and which to keep for further evaluation, as needed. Note that the qualitative screening process does not need to be overly burdensome.

You may not need to fill out every box for every action. This just represents one way of systematically thinking through the relative promise of a variety of potential options for your community, in terms of their ability to meet your goals, as well as your ability to successfully implement them.

After an initial screen, you may want or need to perform a more in-depth evaluation to identify a short list of specific actions, specific sectors to target, or the best approach to use. Evaluate each policy against different criteria.

Align the criteria with the stated goals for the program. For example, criteria may include:. In particular, assess the probable success of the action. Are there solid partners in the community who are willing to take the lead in achieving the goals and take ownership of moving them forward?

Consider putting actions on the back-burner if you are not able to find anyone in the community willing and excited to take them on.

Evaluate each action quantitatively, where possible. For example, several tools are available to help local governments evaluate the costs, benefits, and GHG emissions reduction potential of different strategies. For more information about these tools, see the Resources section below.

Some good examples to review are listed as case studies in the Resources section. Based on the evaluation in Step 5 , determine which actions or broader categories of actions you intend to pursue or investigate further.

Additional information on specific actions and ways to evaluate alternatives are available as part of the Take Action phase. Again, select actions to create a plan that is reasonable and achievable, in addition to being ambitious and inspirational.

Identify a reasonable number of actions that correspond to the resources your community can devote to your program. Depending on the community, having a high number of actions can actually curtail your ability to implement them, simply because the to-do list is overwhelming. Document your decisions on which actions to pursue.

Depending on your situation, this may be an internal document or a formal, public document like a climate change action plan. List the lead entities responsible for moving actions forward in your plan. This will help create accountability and is one way to make the plans more realistic and likely to be accomplished.

Begin coming up with action checklists to carry forward the momentum from the goal-setting and action evaluation processes. Checklists can help assign individual responsibility for actions and break down the process into achievable steps.

Still, you won't have to list the names of the shareholders. Your internal corporate records should include your shareholders' names and the number of shares of stock issued to each of them. The articles of incorporation must specify a street address within the state, and a person located at that address that can receive legal documents, notices, and lawsuits on behalf of the corporation.

The address is sometimes referred to as a registered office, and the person at the address is referred to as a registered agent or statutory agent. In most states, your business location can serve as the registered office, and a corporation or anyone aged 18 or over can be the registered agent.

However, if you don't have an office in the state where you incorporate or prefer to have someone else act as an agent for you, you can hire a professional registered agent. Once you've collected this basic information, you're ready to get started on forming your corporation.

In addition to the articles of incorporation, you'll need bylaws that will guide the way your corporation operates. By knowing what other trademarks are out there, you will understand if there is room for the mark that you want to protect.

It is better to find out early, so you can find a mark that will be easier to protect. Want to talk to your parents or grandparents about estate planning, but feel like the topic is taboo?

You're not alone. Discussions about estate planning are difficult for many families. Use our tips to broach the subject with sensitivity. Setting up a power of attorney to make your decisions when you can't is a smart thing to do because you never know when you'll need help from someone you trust.

Ready to start your business? Check availability. Forming Your Corporation. Learn more. This article is for informational purposes. This content is not legal advice, it is the expression of the author and has not been evaluated by LegalZoom for accuracy or changes in the law. by Jane Haskins, Esq. Read more Policies should be reviewed on a regular basis to ensure they continue to comply with federal and state laws and the needs of the organization.

New laws, regulations and court cases can affect both policy language and how employers implement the policies. Most experts suggest a thorough review of policies at least once a year. Employers should also use resources that will keep them updated in the interim, like subscribing to a service or publication or becoming part of an organization that specializes in HR or employment.

SHRM is committed to updating its members of the latest news on state and federal laws and the latest upcoming or proposed legislation through Government Affairs that may have an impact on HR professionals.

As artificial intelligence technology continues to develop, the demand for workers with the ability to work alongside and manage AI systems will increase.

This means that workers who are not able to adapt and learn these new skills will be left behind in the job market. New, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day.

Skip to main content. Linked In Facebook Twitter Email. Error message details. Copy button. Learn More. How-to Guide. Share Bookmark i Reuse Permissions. Step 1: Identify the Need for a Policy Employers do not need to create policies for every unforeseen event as this will limit management's ability to address individual employee needs or unique situations.

Employers may want to develop a policy: If employees' behavior indicates confusion about the appropriate conduct or how to handle certain situations e. If legal protection of the organization is necessary e. If there is a need for government laws and regulations compliance e.

If there is a need to create consistent standards and rules e. If there is a need to create consistency and fair treatment of employees e. Step 2: Determine Policy Content Policies are written guidelines that explain generally what the employer's requirements are and how employees will be treated.

For example, organizations should not: State that the organization will "only" or "always" do something, or "will" or "must" act in a particular way. Describe employees as "permanent. Use all-inclusive lists, such as in disciplinary procedures or work rules. The typical components are outlined below: Purpose statement.

The purpose statement outlines why the organization is issuing the policy and what the desired effect or outcome will be. For example, "Employees contribute to the corporate culture and reputation of [Company Name] in the way they present themselves. A professional appearance is essential to a favorable impression with customers, regulators and company shareholders owners.

Good grooming and appropriate dress reflect employee pride and inspire confidence on the part of such persons. For more information about these tools, see the Resources section below. Some good examples to review are listed as case studies in the Resources section. Based on the evaluation in Step 5 , determine which actions or broader categories of actions you intend to pursue or investigate further.

Additional information on specific actions and ways to evaluate alternatives are available as part of the Take Action phase. Again, select actions to create a plan that is reasonable and achievable, in addition to being ambitious and inspirational.

Identify a reasonable number of actions that correspond to the resources your community can devote to your program. Depending on the community, having a high number of actions can actually curtail your ability to implement them, simply because the to-do list is overwhelming.

Document your decisions on which actions to pursue. Depending on your situation, this may be an internal document or a formal, public document like a climate change action plan. List the lead entities responsible for moving actions forward in your plan. This will help create accountability and is one way to make the plans more realistic and likely to be accomplished.

Begin coming up with action checklists to carry forward the momentum from the goal-setting and action evaluation processes. Checklists can help assign individual responsibility for actions and break down the process into achievable steps.

Next steps may include obtaining resources to implement actions; conducting a greenhouse gas inventory to establish a baseline, if necessary; developing a plan to track and report progress; or beginning to implement the actions selected.

The plan includes the estimated GHG emissions savings, scale, timeline, financial feasibility, and technical needs for several measures. Chicago, Illinois: Climate Action Plan Exit Plan that outlines goals, actions, and detailed methodologies to evaluate possible actions within five primary strategies: energy-efficient buildings, clean and renewable energy sources, improved transportation options, reduced waste and industrial pollution, and climate change adaptation.

Miami-Dade County, Florida: GreenPrint Plan Exit Plan that outlines several aspirational goals, specific targets under each, strategies to achieve each target and goal, and a plan for tracking progress. The tool is primarily designed for state-level decision-makers, but could be relevant to other stakeholders.

The tool is tailored to California communities, but broadly applicable. ClearPath is free to ICLEI members, and a day free trial is available for non-members. Acknowledgements: EPA would like to acknowledge Bruce Andersen Wyandotte County, Kansas , Katie Borgella Tompkins County, New York , Alex Dews City of Philadelphia, Pennsylvania , and Sam Gordon Town of DeWitt, New York for their valuable input and feedback as stakeholder reviewers for this page.

Contact Us to ask a question, provide feedback, or report a problem. Jump to main content. Contact Us.

Some questions you might ask include: What is already happening in your community related to these goals? Are specific activities underway? Are there relevant plans and priorities? Are there high-level policies e. How will this effort relate to other community plans e. What are similar communities around the country doing to accomplish these high-level goals?

What are communities in your region doing to accomplish these goals? Are there opportunities for joint projects and collaboration? Are there any local experts in the area who have done research or implemented relevant initiatives that could help shape goals and activities?

Are there data or information available to help you better understand or support the goals? Are there any complementary programs underway e. What is the path to adoption or implementation for this effort?

What are the priorities of political leadership? What are the priorities of the general public? Stakeholders may include: People in your office Others in local government Local experts Community leaders Local business representatives The general public Consider bringing together these stakeholders through a series of informal meetings or a more structured committee, task force, or other group, depending on the scale of your effort.

Be Organized Keep goals concise and to-the-point. Limit each goal to a single sentence to make it easy to understand and follow.

Consider developing two to three tiers of goals—many communities have found this helpful. In this phase, develop high-level goals e. For example, the City of Philadelphia, Pennsylvania, has several specific interim targets in its Greenworks Philadelphia plan, which includes three tiers of goals.

Be Both Ambitious and Reasonable Strive for a reasonable number of goals. The appropriate number of goals will likely scale with the size of your community and the magnitude of the effort.

Consider the level of resources your community can realistically devote to pursuing the goals. In other words, avoid taking on more than you can handle.

a This clause does not apply to small business concerns. b Definitions. As used in this clause—. Alaska Native Corporation ANC means any Regional Corporation, Village Corporation, Urban Corporation, or Group Corporation organized under the laws of the State of Alaska in accordance with the Alaska Native Claims Settlement Act, as amended 43 U.

and which is considered a minority and economically disadvantaged concern under the criteria at 43 U. This definition also includes ANC direct and indirect subsidiary corporations, joint ventures, and partnerships that meet the requirements of 43 U.

Electronic Subcontracting Reporting System eSRS means the Governmentwide, electronic, web-based system for small business subcontracting program reporting. Indian tribe means any Indian tribe , band, group, pueblo, or community, including native villages and native groups including corporations organized by Kenai, Juneau, Sitka, and Kodiak as defined in the Alaska Native Claims Settlement Act 43 U.

This definition also includes Indian-owned economic enterprises that meet the requirements of 25 U. Individual subcontracting plan means a subcontracting plan that covers the entire contract period including option periods , applies to a specific contract, and has goals that are based on the offeror 's planned subcontracting in support of the specific contract, except that indirect costs incurred for common or joint purposes may be allocated on a prorated basis to the contract.

Master subcontracting plan means a subcontracting plan that contains all the required elements of an individual subcontracting plan , except goals, and may be incorporated into individual subcontracting plans , provided the master subcontracting plan has been approved.

Reduced payment means a payment that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions, for supplies and services for which the Government has paid the prime contractor. Subcontract means any agreement other than one involving an employer-employee relationship entered into by a Federal Government prime Contractor or subcontractor calling for supplies or services required for performance of the contract or subcontract.

Total contract dollars means the final anticipated dollar value, including the dollar value of all options. Untimely payment means a payment to a subcontractor that is more than 90 days past due under the terms and conditions of a subcontract for supplies and services for which the Government has paid the prime contractor.

If the Offeror is submitting an individual subcontracting plan , the plan must separately address subcontracting with small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns , with a separate part for the basic contract and separate parts for each option if any.

The subcontracting plan shall be included in and made a part of the resultant contract. The subcontracting plan shall be negotiated within the time specified by the Contracting Officer. Failure to submit and negotiate the subcontracting plan shall make the Offeror ineligible for award of a contract.

i The Contractor may accept a subcontractor's written representations of its size and socioeconomic status as a small business, small disadvantaged business, veteran-owned small business, service-disabled veteran-owned small business, or a women-owned small business if the subcontractor represents that the size and socioeconomic status representations with its offer are current, accurate, and complete as of the date of the offer for the subcontract.

ii The Contractor may accept a subcontractor's representations of its size and socioeconomic status as a small business, small disadvantaged business, veteran-owned small business, service-disabled veteran-owned small business, or a women-owned small business in the System for Award Management SAM if—.

A The subcontractor is registered in SAM; and. B The subcontractor represents that the size and socioeconomic status representations made in SAM are current, accurate and complete as of the date of the offer for the subcontract.

iii The Contractor may not require the use of SAM for the purposes of representing size or socioeconomic status in connection with a subcontract. iv In accordance with 13 CFR For individual subcontracting plans , and if required by the Contracting Officer , goals shall also be expressed in terms of percentage of total contract dollars , in addition to the goals expressed as a percentage of total subcontract dollars.

The Offeror shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs.

In accordance with 43 U. i Subcontracts awarded to an ANC or Indian tribe shall be counted towards the subcontracting goals for small business and small disadvantaged business concerns , regardless of the size or Small Business Administration certification status of the ANC or Indian tribe ; and.

ii Where one or more subcontractors are in the subcontract tier between the prime Contractor and the ANC or Indian tribe , the ANC or Indian tribe shall designate the appropriate Contractor s to count the subcontract towards its small business and small disadvantaged business subcontracting goals.

A In most cases, the appropriate Contractor is the Contractor that awarded the subcontract to the ANC or Indian tribe. B If the ANC or Indian tribe designates more than one Contractor to count the subcontract toward its goals, the ANC or Indian tribe shall designate only a portion of the total subcontract award to each Contractor.

The sum of the amounts designated to various Contractors cannot exceed the total value of the subcontract. C The ANC or Indian tribe shall give a copy of the written designation to the Contracting Officer , the prime Contractor, and the subcontractors in between the prime Contractor and the ANC or Indian tribe within 30 days of the date of the subcontract award.

i Total dollars planned to be subcontracted for an individual subcontracting plan ; or the Offeror 's total projected sales, expressed in dollars, and the total value of projected subcontracts , including all indirect costs except as described in paragraph g of this clause, to support the sales for a commercial plan;.

ii Total dollars planned to be subcontracted to small business concerns including ANC and Indian tribes ;. iii Total dollars planned to be subcontracted to veteran-owned small business concerns ;.

iv Total dollars planned to be subcontracted to service-disabled veteran-owned small business;. v Total dollars planned to be subcontracted to HUBZone small business concerns;. vi Total dollars planned to be subcontracted to small disadvantaged business concerns including ANCs and Indian tribes ; and.

vii Total dollars planned to be subcontracted to women-owned small business concerns. i Small business concerns;. ii Veteran-owned small business concerns ;. iii Service-disabled veteran-owned small business concerns ;. iv HUBZone small business concerns;.

v Small disadvantaged business concerns ; and. vi Women-owned small business concerns. A firm may rely on the information contained in SAM as an accurate representation of a concern's size and ownership characteristics for the purposes of maintaining a small, veteran-owned small, service-disabled veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business source list.

Use of SAM as its source list does not relieve a firm of its responsibilities e. i Small business concerns including ANC and Indian tribes ;. v Small disadvantaged business concerns including ANC and Indian tribes ; and. i Cooperate in any studies or surveys as may be required;. ii Submit periodic reports so that the Government can determine the extent of compliance by the Offeror with the subcontracting plan;.

iii After November 30, , include subcontracting data for each order when reporting subcontracting achievements for indefinite-delivery, indefinite-quantity contracts with individual subcontracting plans where the contract is intended for use by multiple agencies;.

The reports shall provide information on subcontract awards to small business concerns including ANCs and Indian tribes that are not small businesses , veteran-owned small business concerns , service-disabled veteran-owned small business concerns , HUBZone small business concerns, small disadvantaged business concerns including ANCs and Indian tribes that have not been certified by the Small Business Administration as small disadvantaged businesses , women-owned small business concerns , and for NASA only, Historically Black Colleges and Universities and Minority Institutions.

Reporting shall be in accordance with this clause, or as provided in agency regulations;. The records shall include at least the following on a plant-wide or company-wide basis, unless otherwise indicated :. i Source lists e. ii Organizations contacted in an attempt to locate sources that are small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or women-owned small business concerns.

iii Records on each subcontract solicitation resulting in an award of more than the simplified acquisition threshold , as defined in FAR 2. A Whether small business concerns were solicited and, if not, why not;.

B Whether veteran-owned small business concerns were solicited and, if not, why not;. C Whether service-disabled veteran-owned small business concerns were solicited and, if not, why not;.

D Whether HUBZone small business concerns were solicited and, if not, why not;. E Whether small disadvantaged business concerns were solicited and, if not, why not;.

F Whether women-owned small business concerns were solicited and, if not, why not; and. G If applicable, the reason award was not made to a small business concern.

iv Records of any outreach efforts to contact-. A Trade associations;. B Business development organizations;. C Conferences and trade fairs to locate small, HUBZone small, small disadvantaged, service-disabled veteran-owned, and women-owned small business sources; and.

D Veterans service organizations. v Records of internal guidance and encouragement provided to buyers through-. A Workshops, seminars, training, etc. vi On a contract-by-contract basis, records to support award data submitted by the offeror to the Government, including the name, address, and business size of each subcontractor.

Contractors having commercial plans need not comply with this requirement. Responding to a request for a quote does not constitute use in preparing a bid or proposal. The Offeror used a small business concern in preparing the bid or proposal if—.

i The Offeror identifies the small business concern as a subcontractor in the bid or proposal or associated small business subcontracting plan, to furnish certain supplies or perform a portion of the subcontract ; or.

ii The Offeror used the small business concern's pricing or cost information or technical expertise in preparing the bid or proposal, where there is written evidence of an intent or understanding that the small business concern will be awarded a subcontract for the related work if the Offeror is awarded the contract.

This written explanation must be submitted to the Contracting Officer within 30 days of contract completion. e In order to effectively implement this plan to the extent consistent with efficient contract performance, the Contractor shall perform the following functions:.

f A master subcontracting plan on a plant or division-wide basis that contains all the elements required by paragraph d of this clause, except goals, may be incorporated by reference as a part of the subcontracting plan required of the Offeror by this clause; provided-.

g A commercial plan is the preferred type of subcontracting plan for contractors furnishing commercial products and commercial services. A Contractor with a commercial plan shall comply with the reporting requirements stated in paragraph d 10 of this clause by submitting one SSR in eSRS for all contracts covered by its commercial plan.

A Contractor authorized to use a commercial subcontracting plan shall include in its subcontracting goals and in its SSR all indirect costs , with the exception of those such as the following: Employee salaries and benefits; payments for petty cash; depreciation ; interest; income taxes; property taxes; lease payments; bank fees; fines, claims , and dues; original equipment manufacturer relationships during warranty periods negotiated up front with the product ; utilities and other services purchased from a municipality or an entity solely authorized by the municipality to provide those services in a particular geographical region; and philanthropic contributions.

This report shall be acknowledged or rejected in eSRS by the Contracting Officer who approved the plan. h Prior compliance of the offeror with other such subcontracting plans under previous contracts will be considered by the Contracting Officer in determining the responsibility of the offeror for award of the contract.

i A contract may have no more than one subcontracting plan. When a contract modification exceeds the subcontracting plan threshold in FAR When the goals in a subcontracting plan are amended, these goal changes do not apply retroactively.

j Subcontracting plans are not required from subcontractors when the prime contract contains the clause at FAR k The failure of the Contractor or subcontractor to comply in good faith with 1 the clause of this contract entitled "Utilization Of Small Business Concerns;" or 2 an approved plan required by this clause, shall be a material breach of the contract and may be considered in any past performance evaluation of the Contractor.

Purchases from a corporation, company, or subdivision that is an affiliate of the Contractor or subcontractor are not included in these reports. Subcontract awards by affiliates shall be treated as subcontract awards by the Contractor.

Subcontract award data reported by the Contractor and subcontractors shall be limited to awards made to their immediate next-tier subcontractors. Credit cannot be taken for awards made to lower tier subcontractors, unless the Contractor or subcontractor has been designated to receive a small business or small disadvantaged business credit from an ANC or Indian tribe.

Only subcontracts involving performance in the United States or its outlying areas should be included in these reports with the exception of subcontracts under a contract awarded by the State Department or any other agency that has statutory or regulatory authority to require subcontracting plans for subcontracts performed outside the United States and its outlying areas.

This report is not required for commercial plans. The report is required for each contract containing an individual subcontracting plan.

i The report shall be submitted semi-annually during contract performance for the periods ending March 31 and September A report is also required for each contract within 30 days of contract completion. Reports are due 30 days after the close of each reporting period, unless otherwise directed by the Contracting Officer.

Reports are required when due, regardless of whether there has been any subcontracting activity since the inception of the contract or the previous reporting period. When the Contracting Officer rejects an ISR, the Contractor shall submit a corrected report within 30 days of receiving the notice of ISR rejection.

A When a subcontracting plan contains separate goals for the basic contract and each option , as prescribed by FAR B If a subcontracting plan has been added to the contract pursuant to Government employees are subject to the same behavioral biases as the public.

Some have argued that because they are not disciplined by the market, public servants are more likely to make errors due to heuristics and biases Viscusi and Gayer, ; Cooper and Kovacic, There have been calls to better incorporate psychology into the study of public administration Grimmelikhuijsen et al.

The revolution wrought by behavioral economics has paid much less attention to those who must comply with regulations, not to improve their own welfare, but to improve the welfare of others. The most prominent group of regulatees is businesses who must comply with regulations to preserve the environment, safeguard their workers, protect consumers and comply with a myriad of other requirements.

Businesses may be the largest community that must comply with regulations but are not the only one. Hospitals, schools, and other levels of government are also subject to government regulation. Indeed, in depth attention to the regulated community has long been lacking Pautz, What have we learned from behavioral economics that can help us understand how those charged with compliance react to regulations?

We note that considerable dispute exists within the behavioral economics community and between behavioral economists and proponents of classical economics. Our observation that business owners may be subject to heuristics and biases will not settle these disputes. Regardless of any normative judgment on their behavior however, we feel that it is an important observation that these heuristics play a role in regulatory perception and acknowledging them can only help in improving the development and implementation of regulations.

When it comes to applying these insights to the regulated community, we may still have a long way to go. Rather than review the behavioral economics literature a task too large for this endeavor in any case , below, the relevant heuristics and biases that we observed as affecting regulated businesses are outlined.

Before proceeding to that discussion, there is a brief discussion of the survey and interview methodology. The survey focused on the manufacturing sector in seven Midwestern states—where the discussions about the regulatory impact on business have had the greatest political relevance.

The declining manufacturing base in the Midwest has made it particularly fertile ground for these debates about government regulation.

The study was conducted in two phases: a randomly conducted survey of businesses followed by in-depth interviews with eight businesses recruited through the survey. The sample was stratified by the proportion of small and large businesses in the seven states; only small businesses were recruited for the survey portion of the study, after the initial wave in Indiana.

To ensure businesses in all states surveyed, quotas were set by set to ensure a minimum number of observations collected.

The target population was narrowed to small manufacturing businesses after attempts to reach business leaders in large-sized businesses proved difficult. We did not see this as a problem as it allowed us to focus on small businesses which are at the center of much rhetoric surrounding regulation Dennis Jr.

That said, the results may not be generalizable to larger businesses. Small businesses are different in that the business owner is involved first hand in regulatory compliance.

In large businesses, there are specialists who are charged with this function and only major issues rise to higher management. This is likely to have a major effect on the way business owners perceive regulation Rinfret and Pautz, Footnote 3.

Business executives including managers, directors, owners and partners were randomly recruited. Fielding was conducted by phone between July and September , except for limited email recruitment in Indiana and Pennsylvania which was discontinued due to a low cooperation rate in this mode.

The study was conducted in seven contiguous states, primarily located in the Midwest including Indiana, Illinois, Michigan, Minnesota, Ohio, Pennsylvania and Wisconsin. Details on the survey methodology as well as how survey respondents were selected for interviews are shown in Appendix A and the text of the survey itself is shown in Appendix B.

The survey analysis pointed to behavioral factors potentially lying behind small business perceptions of and reaction to regulation. While we had always intended to do in-person interviews there was a question at the end of the survey asking if respondents would be willing to have detailed follow-up conversations these behavioral factors highlighted the need for more detailed conversations.

Five of the interviews were in person and included visits to the manufacturing site; three were conducted by phone at the preference of the interview subjects.

The business owners were promised confidentiality standard practice in qualitative research Rubin and Rubin, Interview subjects were asked a standard set of questions see Appendix C for interview script with follow-up questions asked if necessary.

The interviews generally focused on giving context to the survey responses and filling in gaps. Questions were designed to get at complex and open-ended issues not surveyed, such as the nature of who managed compliance, history of interactions with the government, and where beliefs about regulation came from.

Interview scripts were then searched for common themes which are discussed in next section along with the survey results. The purpose of this work is not to test specific hypotheses. Indeed, it was originally conceived as a project aimed to achieve a better understanding of small business owner behavior and attitudes.

As with any good qualitative research, this work was intended to generate hypotheses regarding the reaction of small business owners to regulation.

Once immersed in the data-gathering process, it became clear to us that the behavioral economics literature spoke to a great deal of what we were seeing in the survey and it informed our interviews. We now turn to explaining this connection and the possible implications for regulatory policy. While some have described other factors that determine regulatory compliance, there has been little connection to behavioral literature in explaining the behaviors and attitudes of regulated entities.

The work of Kahneman and others presents a litany of such possible explanations. The survey and interviews revealed business owners exhibiting a series of heuristics and biases.

While researchers have identified hundreds of such biases and heuristics many of which overlap , Footnote 4 four were prominent in our survey and particularly our interview data. The availability heuristic: Because the ability to recall information is affected by a variety of factors unrelated to frequency, individuals are unduly influenced by easy to recall available events Tversky and Kahneman, The bandwagon effect: Many people seek evidence that is compatible with beliefs.

It is intellectually easier to do so than to challenge initial beliefs. Exposure to others who believe similarly to you reinforces your initial belief Sunstein, Anchoring: We tend to anchor our views on a small number of incidents in forming our opinions about something.

A dramatic incident has more staying power in our minds than a mundane one Tversky and Kahneman, Self-serving bias: There is a tendency to ascribe positive behaviors and actions to oneself while faulting other parties for negative outcomes Pronin and Schmidt, We make no claim that this list of heuristics is an exhaustive compilation of the behavioral response to regulation of businesses.

As we will note below, the demonstration of the presence of these heuristics argues for more systematic work examining how behavioral economics can better explain polarization about regulatory issues.

All of these heuristics and the biases that result from them and their impact on perceptions regarding regulation are discussed below. The ability of individuals to mentally retrieve an instance of something affects their assessment of the probability of that occurrence.

Among the most significant contributors to availability is how recently one has been exposed to information or a task.

One of the most regular regulatory compliance activities that a small business owner must engage in is keeping records and completing paperwork for the government. In both the survey and interviews, the subject of reporting and recordkeeping came up repeatedly.

Among those surveyed, approximately half reported their company spent more than an hour per week filling out government compliance forms which may serve as a constant reminder of the impact of regulations. Survey respondents were asked about specific types of regulations and whether they had a significant impact on the business.

The ranked results appear in Table 1. Environmental and worker safety regulations are often the poster children for regulatory burden.

Interview subjects demonstrated this phenomenon even more clearly. One of the interview subjects had prepared a visual aid for me. On one side of the desk was one binder. On the other was a pile of eight binders. In contrast, changing your operating process because of a regulation quickly becomes invisible to you.

This is an instance of what Kahneman , p. These regulations are generally accepted by businesses that have already complied with them. They also often understand the purpose of such regulations and accept the burden associated with it. These regulatory requirements quickly become less available in the mind of those who comply with them.

One might think that completing paperwork would fall in this category but every time one fills out a form, one must find new information.

In so doing, one is reminded of all the frustrations associated with doing so. Reporting and recordkeeping requirements also irritated our interview subjects because they did not understand the purpose of many of them.

This is in line with literature on red tape. Tasks that are both burdensome and serve an unclear purpose produce a negative emotional response from those forced to undertake them in part by imposing a sense of powerlessness Hattke et al.

For this reason, regulated entities care as much about the process by which they interact with government as they do about the outcomes Moynihan et al.

If the outcomes are invisible and the process burdensome, there is a recipe for a negative perception by regulatees. Business owners feel that many of the records they keep are never seen by anyone. Many of the reports businesses submit are required for reasons that are never explained to business owners.

This increases their dissatisfaction with paperwork requirements. When the requirements are or seem duplicative this dissatisfaction is multiplied. For these reasons, the business owners felt much more strongly about requirements for reporting and recordkeeping than about regulations that may impose a greater financial burden but that are not as available in their minds.

While paperwork requirements are clearly an important determinant of regulatory attitudes, they are not the only determinant. To better understand regulatory resentment, the survey included five questions about attitudes toward regulations see question 8 in Appendix B.

Respondents were asked to choose between five sets of two statements that came closest to their own views. These pairs of statements were also asked in an earlier survey study of regulatory policy Shapiro and Borie-Holtz, Footnote 5 The responses to these questions are displayed in Table 2.

Interestingly, the amount of hours spent filling out paperwork had a statistically significant correlation with only two of these responses the questions on the number of regulations and on small business competitiveness.

So while it is clear that recordkeeping and reporting requirements have a disproportionate weight in affecting business perceptions, there is more at work here.

One variable that jumped out as also important was party affiliation. Table 3 shows the percentage of Democrats, Independents, and Republicans and those with no party affiliation that agreed with the regulatory attitude statements we gave them.

The differences between those who identified with the varied parties is statistically significant for three of the five questions. Party identification also had significant relationships with the following responses to survey questions:. Kaufmann and Tummers find that political conservativism exacerbates dissatisfaction with red tape.

This may play a role here as well. Social cascade bandwagon effects and group polarization, play an important role in amplifying extreme views Sunstein, The Internet and social media have made it much easier for people to seek out like minded individuals who will reinforce their views on a particular subject which were perhaps shaped by the availability heuristic.

Even when exposed to balanced information, people pick out the portions that are more in line with their pre-existing preferences Taber and Lodge, Several interview subjects discussed stories they had seen on the Internet about government or about regulations.

Footnote 6 Some of the interpretations of these stories or perhaps the stories themselves were clearly false. President Obama was blamed for the Great Recession, which began before his presidency, and the health care initiatives pursued by Presidents Clinton and Obama were described as government provided socialized medicine.

Clearly this book had reinforced his negative views toward regulation. The survey also contained a question about how business owners found out about new regulations with which they would need to comply. Table 4 displays these sources. Just three out of 10 respondents got their information straight from a government agency.

In other words, many people are hearing about their obligations from sources unlikely to view those requirements favorably. But it seems at least as likely that initial impressions that were created by the availability or anchoring heuristics Footnote 7 or the actual burden of regulations and were then reinforced by repeated exposure to arguments that regulation is unreasonable, burdensome, and kills businesses or jobs.

The next time one of these business owners fills out a form, their negative reaction to doing so will be shaped by the negative reinforcement they have been exposed to since the last time they interacted with the government.

We are prone to collect too few observations before rendering a judgment Kahneman, Indeed, one dramatic incident can overcome the impression of a larger number of routine ones. Other researchers have found that people are influenced by anchors irrespective of whether the anchor is relevant, and that people are generally unaware of the impact of anchoring Wilson et al.

This pattern evinced itself in our interviews. Two interview subjects mentioned negative interactions unprompted by the interviewer they had with government enforcement personnel while numerous others described ones they had heard about from neighbors or competitors. One interviewee told us about a fine he had received during a safety inspection.

He clearly thought the fine was unreasonable and there was no question from his tone and his subsequent comments that the incident had a disproportionate effect on his attitude toward regulators and regulations.

Another small business owner told us a similar story. Forty years ago he had been sued by a worker he had fired. The worker claimed that he had been fired because he had been hurt on the job a claim vigorously denied by my interview subject.

The court gave an award to the worker. The business owner that was able to recount the details of the case 40 years later and it shaped his attitudes toward government. He was probably the most anti-regulatory of our eight interview subjects. Incidents did not have to happen to the business itself for it to affect owners.

At least two other interview subjects again unprompted described incidents that they had heard about from competitors or neighbors where there was treatment by the government that was perceived to be unfair.

These incidents were part of what formed their attitudes toward government regulation and government enforcement of that regulation. This is consistent with blame-assignation in other contexts Davis and Pink-Harper, Obviously, some of the actions by government may not have been unfair.

There is no way to judge the case of the year-old workers compensation claim, and the incidents in neighboring businesses are even murkier since they were filtered through two retellings. And it is indeed possible perhaps probable that these owners were already disposed to be opposed to government regulation before the incident happened or they heard about it.

It was clear from our interviews that this phenomenon is prevalent in the regulatory arena. You could ship anything anywhere. It is also possible to see this type of anchoring interacting with the bandwagon effect described above.

In the Internet era, when anyone is upset about unfair treatment, the first thing they do is go on the Internet looking for advice or sympathy.

This will likely result in finding support for anti-regulatory attitudes and other examples of purported governmental overreach. One will also listen with more sympathy when political figures decry over-regulation if you perceive yourself to have been the victim of such phenomena. You know that noncompliance penalties can be unbelievably severe, so you worry about that constantly.

Business owners had varying perceptions of the state of the economy in Responses to the question on the state of the economy correlated strongly with the main questions designed to measure perceptions about regulations.

Mood effects are prominent in both the behavioral economics literature and the organizational behavior literature Wright and Bower, If a business owner or manager believes the economy is bad or is just concerned about the future of their business it is likely to impact their attitude toward anything that has a negative impact on their financial welfare, including regulations.

Similarly, research in organizational behavior has shown that individuals with negative work experiences tend to blame organizational red tape Davis and Pink-Harper, A similar behavior may explain negative attitudes toward government regulation. When a business fails or does poorly the owner of the business must ascribe the failure or poor performance to some cause or combination of causes.

Research on self-serving biases point toward business owners finding external causes for their misfortune Pronin and Schmidt, Of course, external causes may be at fault for a business failure.

A poor economy could be to blame as could the opening of a competitive business with a new technology or particularly desirable product. Or it could be government regulation that is at fault. What the literature on self-serving bias points to though is that in apportioning blame for failure, the business owner will overemphasize external factors and underemphasize her own role.

The bandwagon effect described above makes regulation an even more attractive external source of blame. While the businesses interviewed had records of success and there were no questions specifically asking about the causes of setbacks, at least one business owner blamed the government particularly Democrats for the tough times during the Great Recession.

Bombarded by rhetoric about government regulation, anyone searching for people to blame for poor outcomes in their business has an easy target. Some of the interviewees demonstrated that disclosure requirements often fail to take into account human nature.

The owner with the binders on his desk was not the only one with a visual aid. These walls were filled with mandatory notices to their workers about worker safety, worker rights, and other required disclosures.

The owners did not need to say anything to make their points. Seeing these walls for the first time, I barely had any inclination to read what they said. If you pass such a wall every day, you are even less likely to pay attention to what is on it or to notice any new disclosures if one sees such disclosures as intended to solely inform union representatives of their rights, then their applicability to the average worker may be less important.

Several businesses also cited new OSHA regulations on the disclosure of chemical hazards. Footnote 8 They described the relabeling as burdensome but more importantly questioned the benefits of such a regulation. It is entirely possible that workers at these facilities would have a different perspective on the use of these pictograms but the owners did not seem to think that their employees paid much attention to them.

This is not to demean all disclosure requirements Sunstein, , p. He also argues p. That is a lot of requirements for a disclosure to meet. And our research suggests that the list is good but incomplete.

More attention should be paid to how disclosure requirements are implemented, how multiple disclosures targeted at the same audience interact with each other, and whether the effect of disclosures diminish over time.

The disclosures at the workplaces of interview subjects may not meet the basic criteria for success of an information disclosure that the beneficiaries should receive and understand the information Carrigan and Coglianese, because of a failure to incorporate these additional factors.

Behavioral economics has become a considerable focus in public policy over the past decade. Spurred on by Nobel Prize winners Daniel Kahneman and Richard Thaler and such proponents as Cass Sunstein, it has prompted significant changes in policy on both sides of the Atlantic.

This is particularly true in regulatory policy. One area of regulation that behavioralists have neglected is the response to regulations of those charged with complying with them, not to benefit themselves but to benefit others. With billions of dollars of regulatory costs and benefits at stake, this is a potentially critical area for further research.

Furthermore, the behavioral response to regulation shapes attitudes toward government more generally. In a time of increasing political polarization, how businesses interpret regulatory requirements both impacts their political attitudes and is in turn impacted by them.

A vicious cycle ensues where bad experiences with regulation are reinforced by anti-regulatory jeremiads on the Internet which then shape how future experiences with regulation are perceived. More research is needed on mapping the existing lists of heuristics and biases on to behaviors by business owners.

There are many possible hypotheses that could follow from this work. The difference between small and large businesses is likely to be important as the one representative of a large business had very different reactions to regulation see Rinfret and Pautz for broader examples of this phenomenon.

Do heuristics affect the regulatory behavior and attitudes of small businesses more than large businesses? Do the heuristics play out differently in non-manufacturing sectors than in manufacturing where the mood effect may be particularly prominent? Do these heuristics operate differently in non-business regulated communities?

In the shorter run, this study provides support for reforms that others have argued for. Thaler suggests using government policy to reduce the risk associated with starting a small business.

This would have the twin advantages of dealing with loss aversion of small business owners, Footnote 9 and giving small businesses a positive interaction with government on which to anchor their sentiments about the state.

In addition, Viscusi and Gayer suggest applying behavioral insights to regulators. They cite many of the same biases discussed here as playing out in the behavior of regulators.

While their context is largely the choice federal agencies face in crafting rules, our findings indicate that their arguments also apply to the enforcement of those rules.

Training of street level enforcers of regulations to combat the biases that lead to citations for small offenses and inculcating a culture of fear of the government in the regulated community could make a significant difference both in compliance and in the attitude of the regulated.

While violations that clearly causes harm should be strictly prosecuted, incidents like a missing line on a form should be handled with care. A business punished for a paperwork violation will remember it for a long time. Our finding that business owners were frustrated by a lack of understanding regarding the purpose of regulation points out that this distinction could also be applied to rules imposed on the private sector.

The interviews also point to the value of compliance assistance and explaining the purposes of regulation. This is one of the few reforms that could make a difference both to the actual burden experienced by businesses and to their perception of regulations.

Compliance assistance is already practiced by federal and state regulatory agencies, but our experience indicates that there is a considerable demand for more as long as such assistance does not come with the threat of enforcement from businesses. A greater presence of government as a genuine partner in the effort to improve workplace safety, public health, and general welfare would go a long way to changing perceptions of regulation.

Finally, retrospective review of regulations has been a very prominent part of regulatory debates in recent years. This generally involves selecting regulations that have been in place for a number of years and determining whether they are fulfilling their purpose, and estimating the burdens they are imposing.

Initiatives for retrospective review should explicitly focus on reporting and record-keeping requirements as they impose continual costs on businesses.

They could even be incorporated in a revised Paperwork Reduction Act that focuses on the cumulative burden of reporting and recordkeeping requirements Shapiro, Thus, well intentioned interventions can fail because of the way they are construed by the targeted group Shafir, , p.

Debates over regulation have become deeply polarized over the past decade. As a result, many of the debates in regulatory policy involve the two sides talking past each other which in turn amplifies the polarization.

A better understanding of why businesses react to regulation the way they do may hold the promise of turning down the temperature on these debates and perhaps even allowing us to make better regulatory policy.

Individual interview transcripts have not been shared because to do so would violate our Rutgers Institutional Review Board approval. Indeed, we did do one interview with someone in the environmental office of a large business to test this premise and he bore out the assumption that large businesses see regulation as part of their business and use offices dedicated to compliance to manage their regulatory responses.

This is consistent with arguments that large businesses view regulation differently than small businesses Rinfret and Pautz, We use these regulations to show that we are reducing emissions.

html for example last viewed October 12, Two of these statement pairs were adapted from an earlier survey by the Pew Research Center. This may also indicate another phenomenon discussed in the behavioral literature, the role of social norms.

If businesses are discussing the unfairness of regulations with each other, their beliefs about this unfairness becomes more justified in their minds Sunstein, html last viewed November 20, While we did not see loss aversion explicitly in our interview subjects, there is reason to believe that because regulations are always a loss for businesses, that loss aversion is a part of the naturally occurring bias against regulations from owners and managers.

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