The Compliance Action Laboratory

Introduction

In both China and the United States, non-compliance with regulatory rules is a significant problem undermining the law’s function to mitigate economic, health and ecological risks. Much existing research on compliance from criminology, law and economics, and socio-legal studies has helped us to understand the complexity of how rules shape behavior and has explained why violations keep recurring. This body of work has demonstrated the mixed effects of a deterrence punishment-based enforcement strategy and underlined the importance but also the complexity of using collaborative, educational, and punitive approaches to get people to obey the law. Much of this body of work has been less able to evidence a feasible and effective approach to enhance compliance. In social psychology, economic psychology and behavioral economics, there have been a number of studies over recent decades, mostly of an experimental nature, that offer original and also hopeful insights about new approaches to enhance compliance. Moreover, there is much to learn from the practical experience of those managing compliance in complex organizations.

The Laboratory

The Long Institute and its partners seek to start a Compliance Action Laboratory. This laboratory carries out two types of studies:

1. Fundamental research building on insights from psychology, criminology, and economics. The experiments focus on getting in-depth insight into the exact psychological processes that shape compliance or violation, and understanding what mixture of interventions can help to enhance compliance in a laboratory setting. In the controlled laboratory settings of these fundamental experiments, national and cultural differences between China and the United States also can be studied, which are of fundamental use for those seeking to manage compliance in either country.
2. Life field experiments. These field experiments are developed as randomized trials testing out potential reforms that can help enhance compliance in complex, real-life organizational settings. In this second type of activity, the Lab will collaborate with public and private organizations facing compliance challenges. The Lab will conduct an in-depth interdisciplinary study to understand the organizational processes of compliance as they have developed and seek out possible avenues for reform. This study will also utilize insights from the fundamental lab studies to develop interventions that are to be tested through randomized trial evaluations. In this second type of work, the Lab will act partly as a think tank and consultancy with a pro bono as well as paying client base, and partly as a research institute gathering and analyzing data.

This laboratory is unique in its kind as it is one of the first laboratories to focus on law, and one of the few laboratories dedicated to field experiments in actual complex practices, and the only one to focus on compliance. This will result in a scientific and evidenced-based approach to compliance management and reforms that are of direct relevance to business, regulators and consultants, as well as to legal, social and behavioral sciences. The Compliance Action Lab is to function as a series of contracts with business and regulators that want to collaborate with the Lab’s top interdisciplinary scholars in the U.S. and in China to find and test better ways to enhance compliance.

Structure

The Compliance Action Laboratory will consist of a consortium of scholars from different disciplines, most notably management science, social psychology, behavioral economics, criminology, anthropology, and sociology of law. It would run a number of fundamental experiments (about 4 to 6 each year) and field studies (about 3-5 each year), in real life situations either at university campuses or in business contexts or at regulatory agencies. The experiments and studies are conducted by scholars and their students with formal training in the methods to be used. The outcomes of the experiments are published in top academic journals as well as in practice-oriented policy briefs and other publications, presentations and business case studies. Initial experiments will be conducted on campus, both in lab and field settings. Later on, the Lab will work for clients in the public and private sector in the United States and in China.

Funding will start with seed funding for the pilot phase from the existing Long Institute operating budget. To move to bigger and comprehensive funding, funding will be sought for the second year onwards, both in the private sector and through research grants. From year 4 or 5 funding is to be made sustainable with increasing revenue from paying Lab clients.

Student Involvement and Compliance Clinic

The fundamental experiments in the Lab will involve students working with the Lab’s interdisciplinary faculty. From the start, Psychology graduate students will play a key role in the development, execution and analysis of experiments. UCI graduate students will gain crucial experience working in an experimental setting that is cross-cultural and involves the United States and China. In addition, Psychology students will work on legal issues which will foster a new generation of interdisciplinary young scholars who combine behavioral and social science and apply it to law, which is essential for legal research and practice. Finally, Psychology graduate students will work on directly dealing with large problems for public and private interests and thus learn to apply their research and theoretical expertise in a practical environment.

The field studies in complex organizations can involve other students, including students of sociology, business management and law. It is envisioned that this part of the Lab can be formed into a Compliance Clinic where these students can gain experience in learning and applying knowledge and skills about the law, about organizational processes, about decision making and about research methods in a real client related context. This will prepare them very well for a rapidly growing job market of compliance management.