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Carrots, Sticks and Value Actuation as Policy Instruments: Evidence from the Vineyard

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Intellectual Contribution by Tom Thomas

Contribution Title

Carrots, Sticks and Value Actuation as Policy Instruments: Evidence from the Vineyard


Association of Public Policy and Management




As states and the federal government have achieved dramatic success in reducing many of the most immediate threats to human health and ecological welfare, the salience of the natural environment as a public issue has receded. With it has ebbed the willingness of regulated communities and the general public to bear the costs of new regulatory initiatives.

In a political climate characterized by relative complacency and resistance, reformers have focused primarily upon incentive-based programs as a means to improve the efficiency and effectiveness of regulatory efforts. However, the political, legal and practical barriers to effective incentive-based schemes remain substantial, and become ever more evident as pioneering programs come on line. (Current efforts to control mercury emissions of power plants with a cap-and-trade system offer an instructive case in point.)

In a regulatory environment characterized by gridlock, and punctuated by wide swings in both philosophical orientation and enforcement practices, even those with a profound mistrust of managerial intentions and the ability of market forces to allow well-intentioned self-regulatory efforts have begun to explore the feasibility of achieving policy goals through a mix of governmental and non-governmental means.

Several major candidates have been identified in the literature as potential motives for companies voluntarily exceeding minimum regulatory requirements, primary among them: 1) external pressures from community and environmental groups and activists, 2) the threat of more stringent regulatory regimes if voluntary initiatives are not forthcoming, 3) pragmatic desires to reduce costs (of raw materials, waste disposal, employee health care, liability, etc.), improve quality, boost sales, or polish company or brand image, and 4) value-driven efforts motivated by a sense of stewardship or corporate social responsibility among employees and top executives.

A recent survey of 380 wineries located throughout the U.S. probes executive motivations for adopting progressive environmental practices that exceed regulatory requirements. Analysis of survey responses yields factors representing internal motivation, external pressures, and regulatory considerations. Regression analysis is used to examine the impact of these factors on existing environmental practices (implementation of environmental management systems, use of chemicals, resource conservation, waste reduction, etc.) and future plans.

The results suggest that neither carrot (market incentives) nor stick (threat of new penalties) are as effective as personal values and concerns in motivating companies to exceed regulatory requirements. Governmental programs that seek to encourage the expression and actuation of intrinsic motivations may be an effective, relatively inexpensive, and currently under-used, policy option.

Complete Citation

Carrots, Sticks and Value Actuation as Policy Instruments: Evidence from the Vineyard, presented at the Association of Public Policy and Management annual research conference, October 2004, Atlanta, Georgia.


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