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  • 2015
  • Working Paper

The Integrity of Private Third-party Compliance Monitoring

By: Jodi L. Short and Michael W. Toffel
  • Format:Print
  • | Language:English
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Abstract

Government agencies are increasingly turning to private, third-party monitors to inspect and assess regulated entities’ compliance with law. The integrity of these regulatory regimes rests on the validity of the information third-party monitors provide to regulators. The challenge in designing third-party monitoring regimes is that profit-driven private monitors, typically selected and paid by the firms subject to monitoring, have incentives to downplay problems they observe in order to satisfy and retain their clients. This paper discusses the most important factors that our research and the research of many others has shown can affect the integrity of third-party monitoring and highlights some policy implications for regulators designing third-party monitoring regimes.

Keywords

Regulation; Compliance; Compliance Policies; Conflict Of Interest; Independent Third Party; Inspection; Audit Quality; Auditor; Audit; Environment; Production; Supply Chain; Quality; Government Administration; Working Conditions; Safety; Labor; Governing Rules, Regulations, and Reforms; Governance Compliance; Manufacturing Industry; Public Administration Industry; Accounting Industry; Service Industry; United States

Citation

Short, Jodi L., and Michael W. Toffel. "The Integrity of Private Third-party Compliance Monitoring." Harvard Kennedy School Regulatory Policy Program Working Paper, No. RPP-2015-20, November 2015. (Revised December 2015.)
  • SSRN

About The Author

Michael W. Toffel

Technology and Operations Management
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Related Work

    • 2015
    • Faculty Research

    The Integrity of Private Third-party Compliance Monitoring

    By: Jodi L. Short and Michael W. Toffel
    • Fall 2016
    • Administrative & Regulatory Law News

    The Integrity of Private Third-party Compliance Monitoring

    By: Jodi L. Short and Michael W. Toffel
Related Work
  • The Integrity of Private Third-party Compliance Monitoring By: Jodi L. Short and Michael W. Toffel
  • The Integrity of Private Third-party Compliance Monitoring By: Jodi L. Short and Michael W. Toffel
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