¹ “Effective administration is perhaps the great problem of the future. (…) It is the work of lawyers to make the law in action conform to the law in the books (…) by making the law in the books such that the law in action can conform to it, and providing a speedy, cheap and efficient legal mode of applying it”: Pound, R, “Law in books and law in action” (1910) 44 American Law Review 35 at 36Google Scholar.

² “Le droit dogmatique considère qu’il y a règle de droit véritable dès qu’un texte émanant de l’organe constitutionnellement compétent a été régulièrement promulgué. Peu importe que ce texte ne soit pas effectivement appliqué. (…) L’effectivité n’appartient pas à la définition de la règle de droit”: Carbonnier, J, “Effectivité et ineffectivité de la règle de droit” (1957) 9 L’année sociologique 3 Google Scholar.

³ “Traditional regulatory theory simplified the [regulatory task] by assuming that consumers made rational choices. The regulator then could proceed, in brief, by positing a rational consumer in a specified market environment and comparing the choices she would make if choice were costless with the choices she would make if choice were costly in various way. If these (theoretically derived) choices differed widely (and the models had some empirical validation), there was reason to intervene in actual markets”: Schwartz, A, “Regulating for rationality” (2015) 67 Stanford Law Review 1384 Google Scholar.

⁴ Departures from rational behaviour are widely analysed in behavioural economics, sociology, psychology and behavioural ethics. In addition, neuroscience, with brain imaging, eye-tracking and other methods, could provide useful insights, but their contribution to rule-making and law-making is still limited.

⁵ R Van Bavel et al, Applying Behavioural Sciences to EU Policy-Making, JRC Scientific and Policy Reports (Publications Office of the European Union 2013) 6.

⁶ OECD, Best Practice Principles for Regulatory Policy: Regulatory Enforcement and Inspections (OECD 2014) 3 Google Scholar.

⁷ Kingsbury, B, in “The concept of compliance as a function of competing conceptions of international law” (1998) 19 Michigan Journal of International Law 345 at 346Google Scholar makes “the contrary argument that the concept of compliance with the law does not have, and cannot have, any meaning except as a function of prior theories of the nature and operation of the law to which it pertains”.

⁸ This approach to compliance is strictly linked to the neoclassical economics theory, based on the utility maximisation assumption Becker, (GS, “Crime and Punishment: An Economic Approach” (1968) 76(2) Journal of Political Economy 169 CrossRefGoogle Scholar; Stigler, GJ, “The Theory of Economic Regulation” (1971) 2(1) Bell Journal of Economic and Management Science 3)CrossRefGoogle Scholar, according to which people and firms act on the basis of a rational assessment of the option providing the largest net gain: see M Alligham, Rational Choice (Macmillan 1983). “In the taxation context, for example, a taxpayers’ choice is between compliance and tax evasion. By complying, the taxpayer incurs a loss in the form of taxes paid, but evading tax there is the chance of a relative gain if evasion is undetected. Alternatively, there is the chance of an ever greater loss if the evasion is detected and penalized. According to the rational choice model, taxpayers calculate these risks when deciding whether or not to comply”: Murfy, K, “The Role of Trust in Nurturing Compliance: A Study of Accused Tax Avoiders” (2004) 28 Law and Human Behaviour 187 at 188Google Scholar.

⁹ Tversky, A and Kahneman, D, “Judgment under Uncertainty: Heuristics and Biases” (1974) 185 (4157) Science 1124 at 1128.CrossRefGoogle Scholar

¹⁰ Moreover, the adviser in a conflict of interest might no longer feel responsible for the consequences as a perverse effect of disclosure: Sah, S, Cain, DM and Loewenstein, G, “Confessing one’s sins but still committing them: transparency and the failure of disclosure” in A Oliver, Behavioural Public Policy (Cambridge University Press 2013) 148 CrossRefGoogle Scholar.

¹¹ Weisel, O and Shalvi, S, “The collaborative roots of corruption” (2015) 112(34) PNAS 10651 CrossRefGoogle ScholarPubMed.

¹² I Klein, “The Cost of Self-Reporting”, paper presented at the 13^th Annual Conference, SIDE - ISLE (Italian Society of Law and Economics), 15–16 December 2017, Rome.

¹³ McBarnet, D and Whelan, C, “The elusive spirit of the law: formalism and the struggle for legal control” (1991) 54(6) Modern Law Review 848 CrossRefGoogle Scholar.

¹⁴ Referring his influential study of rules emanating from government, Robert Baldwin (Rules and Government (Clarendon Press 1995) at p 142 underlines that “making rules work involves more than producing rules that are conducive to compliance. If the rules are not designed properly then even perfect enforcement and compliance with the terms of the rules may not lead to the results that are desired by legislators or those regulating in the public interest (eg safe factories, clean rivers)”.

¹⁵ Feldman, Y, “Using Behavioral Ethics to Reduce Organizational Misconduct” (2017) 3(2) Behavioral Science and Policy 88 CrossRefGoogle Scholar.

¹⁶ Y Feldman, in The Law of Good People: Challenging States’ Ability to Regulate Human Behavior (Cambridge University Press, forthcoming) argues that “the good-people rationale – the idea that ordinary people could engage in all types of wrongdoing without being aware of the full meaning of their behavior – greatly complicates the regulatory challenge of states. Because of various psychological and social mechanisms that prevent people from recognizing their wrongdoing and encourage them to feel as if they are far more moral, unbiased, and law abiding than they actually are, individuals today are less likely to react, at least not explicitly, to classical legal signals, which they view as directed to other, ‘bad’ people”.

¹⁷ For instance, “individuals’ unethicality does not depend on the simple calculations of cost-benefit analysis, but rather depends on the social norms implied by the dishonesty of others and also on the saliency of dishonesty”: Gino, F, Ayal, S and Ariely, D, “Contagion and differentiation in unethical behavior: the effect of one bad apple on the barrel” (2009) 20(3) Psychological Science 393 CrossRefGoogle Scholar.

¹⁸ Regulations must be divided into rules and principles, where the core element of rules is the content which directly affects the end users, differently from principles (such as free competition) which must be applied by rules: R Dworkin, Taking Rights Seriously (first published 1977, Harvard University Press 1997); M De Benedetto, M Martelli and N Rangone, La qualità delle regole (Il Mulino 2011) 13.

¹⁹ According to a traditional assumption (based on a certain view of separation of powers) “the administration exercises discretionary powers in individual cases, while rules concerning an undetermined class of subjects or even all of them are reserved to Parliament. But this view fails to provide an account of much of today’s activities of public administrations in two respects. First, there are individual decisions potentially affecting a large part of the population, such as the authorization to build and manage a nuclear plant. (…) Second, modern societies are not regulated only by legislation, but also by innumerable rules, often having a technical nature, issued by public administrations, for example, with regard to the marketing of pharmaceutical products and to the delivery of electronic communications”: Della Cananea, G, Due Process of Law Beyond the State: Requirements of Administrative Procedure (Oxford University Press 2016) pp 111–112 CrossRefGoogle Scholar.

²⁰ The approaches and tools used to improve the quality of legislation differ from those implemented for regulation. Indeed, while drafting has traditionally been performed and improved in the domain of legislation, other good quality regulation tools (such as regulatory impact assessment, regulatory burden measurement, SME proportionality test, ex post evaluation etc) are mainly used by regulators.

²¹ One challenge to effectiveness is obscure and ambiguous rules and regulatory inflation: E Bardach and RA Kagan, Going by the Book. Unreasonableness. A Twentieth Century Fund Report (Temple University Press 1982) 193.

²² Xanthaki, H, “Quality of legislation: an achievable universal concept or a utopian pursuit?” in M Travares Almeida (ed), Quality of Legislation (Nomos 2011) 75 ; Google Scholar Mousmouti, M, “Effectiveness as an Aspect of Quality of EU Legislation: is it feasible?” (2014) 2(3) The Theory and Practice of Legislation 309 Google Scholar.

²³ Blanc, F, Inspection Reforms: Why, How and With What Results (OECD Publishing 2012)Google Scholar point 29. The so-called “Table of Eleven” determinants of compliance developed by The Netherlands in 2004 comprises 11 dimensions divided into two groups: the enforcement dimension group and those dealing with spontaneous compliance (composed by factors that affect voluntary compliance, ie in the absence of enforcement). In the latter, the level of knowledge and understanding of the rules, as well as the clarity of rules play a crucial role.

²⁴ At European level, the European Parliament, the Council and the Commission made commitments “to update and simplify legislation and to avoid overregulation and administrative burdens for citizens, administrations and businesses, including SMEs, while ensuring that the objectives of the legislation are met”, and the European Commission “undertakes to present annually an overview, including an annual burden survey, of the results of the Union’s efforts to simplify legislation and to avoid overregulation and reduce administrative burdens” (point 48, Inter-Institutional Agreement for Better Law-making of 13 April 2016).

²⁵ Baldwin, supra, note 14, p 16 ff.

²⁶ Bardach and Kagan, supra, note 21, p 58; J Black, “Forms and Paradoxes of Principles Based Regulation” (2008) 13 LSE Legal Studies Working Paper 16; Baldwin, supra, note 14, p 179. These studies challenge the idea that precise and detailed rules discourage non-compliance by increasing deterrence and the probability of punishment, on one hand, and increasing settlements out of court and therefore also a return of resources, on the other: Ehrlich, I and Posner, RA, “An Economic Analysis of Legal Rule-making” (1974) 3(1) Journal of Legal Studies 257 CrossRefGoogle Scholar.

²⁷ Such rules could create a favourable environment for corruption: V Tanzi, “Corruption Around the World: Causes, Consequences, Scope, and Cures” (1998) 45(4) IMF Staff Papers 10–11; Shleifer, A and Vishny, RW, “Corruption” (1993) 108(3) The Quarterly Journal of Economics 599 CrossRefGoogle Scholar.

²⁸ While the EC Toolbox included biased behaviours among the problems that can justify a regulatory intervention in the first step of RIA, a cognitive-based impact assessment has not been yet developed or systematically used at European or national level: Rangone, N, “A Behavioural Approach to Administrative Corruption Prevention” in A Cerrillo i Martínez and J Ponce (eds), Preventing Corruption and Promoting Good Government and Public Integrity (Bruyland 2017) 75–76 Google Scholar.

²⁹ Feldman, Y and Lobel, O, “The incentive of Matrix: The Comparative Effectiveness of Rewards, Liabilities, Duties and Protection for Reporting Illegality” (2008) 2 Regulation and Governance 165 CrossRefGoogle Scholar.

³⁰ As suggested by Feldman, supra, note 15.

³¹ Psychological experiments motivated by cognitive dissonance theory suggest that higher sanctions may increase crime: Akerlof, GA and Dickens, WT, “The Economic Consequences of Cognitive Dissonance” (1982) 72(3) The American Economic Review 318 Google Scholar; see also Frey, B, Not Just for the Money. An Economic Theory of Personal Motivation (Edward Elgar Publishing 1997) p 81 Google Scholar.

³² “Although the idea of exercising authority through social control is attractively simple, it has been widely suggested that in democratic societies the legal system cannot function if it can influence people only by manipulating rewards and costs (…). This type of leadership is impractical because government is obliged to produce benefits or exercise coercion every time it seeks to influence citizens’ behavior”: Tyler, TR , Why People Obey the Law (Yale University Press 1990) 22–23 Google Scholar. “The authority must constantly demonstrate their credibility by maintaining a high level of deterrent potential, something that is difficult and sometimes impossible to do given the fiscal constraints. While our society, for example, expends large amounts of money to make the risk of being caught and punished for murder sufficiently high to be a deterrent, it does not devote similarly high levels of resources to combating speeding, littering, or drinking in public streets”: TR Tyler, “Introduction” in TR Tyler (ed), Procedural Justice, vol I (Ashgate 2005) xv and xvi.

³³ Kagan, R and Scholz, JT, “The ‘Criminology of Corporation’ and Regulatory Enforcement Strategies” in K Hawkins and JM Thomas (eds), Enforcing Regulation (Kluwer-Nijhoff Publishing 1984) 73 Google Scholar.

³⁴ Baldwin, supra, note 14, p 142. In the enforcement phase, while the move toward aggressive and legalistic enforcement should increase compliance (“inspectors armed with severe sanctions and instructed to act like policemen are not likely to be ignored”), this result should not blind to the fact that “unreasonableness and unresponsiveness associated with those regulations can keep the full potential of regulation from ever being realized”: Bardach and Kagan, supra, note 21, p 93.

³⁵ Ayres, I and Braithwaite, J, Responsive Regulation: Transcending the Deregulation Debate (Oxford University Press 1992)Google Scholar. In line with this approach, see OECD, International Best Practice Principles: Improving Regulatory Enforcement and Inspections (OECD 2014).

³⁶ Gunningham, N, Grabosky, P and Sinclair, D, Smart Regulation: Designing Environmental Policy (Oxford University Press 1998) 93 Google Scholar.

³⁷ Hampton, P, Reducing Administrative Burdens: Effective Administration and Enforcement (HM Treasury 2005)Google Scholar; OECD, Recommendation on Regulatory Policy and Governance (OECD 2012)Google Scholar.

³⁸ Black, J and Baldwin, R, “When Risk-Based Regulation Aims Low: Approaches and Challenges” (2012) 6(1) Regulation and Governance 2 CrossRefGoogle Scholar; Black, J and Baldwin, R, “When Risk-Based Regulation Aims Low: A Strategic Framework” (2012) 6(1) Regulation and Governance 131 CrossRefGoogle Scholar. For instance, increased sanctions in case of “active tax fraud by manipulation of the balance sheet”, compared to cases in which taxpayers simply forget to report particular income components: Feld, LP and Frey, BS, “Tax Compliance as the Result of a Psychological Tax Contract: The Role of Incentives and Responsive Regulation” (2007) 29(1) Law & Policy 109 CrossRefGoogle Scholar.

³⁹ Baldwin, R and Black, J, “Really responsive regulation” (2008) 71 Modern Law Review 59 CrossRefGoogle Scholar et sqq; Baldwin, R and Black, J, “Really Responsive Risk-Based Regulation” (2010) 32(2) Law & Policy 181 Google Scholar et sqq.

⁴⁰ For instance, it has been observed that people react more to the probability of being detected than to the severity of sanctions: Scholz, JT and Gray, WB, “OSHA enforcement and workplace injuries: A behavioral approach to risk assessment” (1990) 3(3) Journal of Risk and Uncertainty 283 at 284CrossRefGoogle Scholar.

⁴¹ Gunningham, Grabosky and Sinclair, supra, note 36, p 422 ff; Gunningham, N and Sinclair, D, “Smart Regulation” in P Drahos (ed), Regulatory Theory. Foundations and Applications (ANU Press 2017) 134 Google Scholar.

⁴² OECD, supra, note 6, 61 ss.

⁴³ Tyler, TR, “Citizens with legal procedures: a social science perspective on civil procedure reform” (1997) 45 The American Journal of Comparative Law 873 CrossRefGoogle Scholar.

⁴⁴ “Tax authorities and insurance organizations [as well as all authorities wielding power] are supposed to reduce costly punishments, provide supportive procedures and helpful information; and pursue societal goals to assure a service climate. This would, in the long run, create trust toward them which fosters cooperative behavior”: Hofmann, E et al, “Authorities’ Coercive and Legitimate Power: The Impact on Cognitions Underlying Cooperation” (2017) 8(5) Frontiers in Psychology 13 CrossRefGoogle ScholarPubMed. Otherwise, trust and confidence erosion, misadministration and inefficiency create conditions for corruption: people are willing to pay in order to protect from inefficiencies: AD Molina, “Public Ethics and the Prevention of Corruption” in Cerrillo i Martínez and Ponce, supra, note 28, p 164.

⁴⁵ See, for instance, OFGEM, Enforcement Guidelines (2017), points 3.29 and 3.30.

⁴⁶ Eg Art 14-ter, Italian law no 287/1990 on competition; and Art 45, legislative decree no 93/2011, implementing European directives no 2009/72/CE, no 2009/73/CE and no 2008/92/CE on internal market for electricity.

⁴⁷ Drawbacks to this approach include room for opportunistic use of flexibility and the skepticism of firms for fear of being sanctioned: Scholz, JT, “Cooperation, deterrence, and the ecology of regulatory enforcement” (1984) 18(2) Law and Society Review 183 and 185CrossRefGoogle Scholar et sqq; moreover, cooperative strategies require an increased administrative discretion which should be perceived as a symptom of corruption: Kagan and Scholz, supra, note 33, p 80. In this enforcement or regulation dilemma, “while both the regulated firm and the government can choose a cooperative approach to regulatory enforcement and compliance, which would be optimal for both sides, both might have important incentives to choose evasive and conflictual approaches instead”: Potoski, M and Prakash, A, “Voluntary programs, regulatory compliance and the regulation dilemma” in C Parker and V Lehmann Nielsen, Explaining Compliance. Business Responses to Regulation (Edward Elgar 2011) 247 Google Scholar.

⁴⁸ “The cooperative strategies concentrate more enforcement activities on the small set of firms with a record on minimal compliance and on more serious, rather that technical, violations”: Scholz, JT , “ Cooperative regulatory enforcement and the politics of administrative effectiveness” (1991) 85(1) American Political Science Review 120 CrossRefGoogle Scholar. According the abovementioned Enforcement Guidelines, OFGEM “do not normally consider alternative action to be appropriate when addressing potential breaches of competition law. It is also unlikely to be sufficient in sectoral cases when potential breaches are serious or when we have significant concerns about a company’s conduct” (point 3.29).

⁴⁹ Kagan and Scholz, supra, note 33, at 76. “Enforcement strategies that elicit feelings of resentment towards compliance and towards authority appear to lead to subsequent non-compliance among those affected. In contrast, reintegrative tactics that serve to reduce feelings of resentment appear to foster compliance with rules”: Murphy, K, “Enforcing Tax Compliance: To Punish or Persuade?” (2008) 38(1) Economic Analysis and Policy 130 CrossRefGoogle Scholar.

Moreover, for instance, it has been demonstrated that voluntary compliance increases when public authorities publicise the purchase of data on potential tax evaders from international tax havens: D Bethmann and M Kvasnicka, “International Tax Evasion, State Purchases of Confidential Bank Data and Voluntary Disclosures” (2016) Institute of Economic Research, Korea University, Working Paper Series, 1603.

⁵⁰ Field research results performed during the 1980s “have not only confirmed the findings of [early research using] laboratory and scenario studies on procedural justice, but in fact have usually shown stronger procedural justice effects”: Allan Lind, E and Tyler, TR, The Social Psychology of Procedural Justice (Springer 1988) 203 CrossRefGoogle Scholar et sqq.

⁵¹ Tyler, TR, “What is Procedural Justice? Criteria Used by Citizens to Assess the Fairness of Legal Procedures” (1988) 22(1) Law and Society Review 103 CrossRefGoogle Scholar et sqq. “The best-designed regulation is a poor tool for governing if it can only be enforced through constant surveillance and draconian punishment. It makes much more sense to seek to improve both the objective quality of a regulation and the impressions of fair treatment engendered by citizens’ personal experience with the regulation”: EA Lind and C Arndt, “Perceived Fairness and Regulatory Policy” (2016) 6 OECD Regulatory Policy Working Paper 10; this study offers numerous examples of research in social neuroscience leading to similar conclusions, summarised in “The Biology of Fairness” table, ibid, p 8.

⁵² “The absence of considerations of fairness and loyalty from standard economic theory is one of the most striking contrasts between this body of theory and other social sciences – and also between economic theory and lay intuition about human behavior”: Kahneman, D, Knetsh, JL, Thaler, RH, “Fairness and the Assumption of Economics” (1986) 59(4) The Journal of Business S285 CrossRefGoogle Scholar.

⁵³ Differently from consultation, which “may help the administration attain an accurate decision, (…) participation is based on a non-instrumental rationale, in the sense that it ensures that human dignity is adequately respected by public administrators when taking decisions that potentially affect the lives of individuals and groups. Following another line of reasoning, participation performs a democratic role, in the sense of allowing citizens to express their views within decision- making processes”: Della Cananea, supra, note 19, pp 110–111. See also Alemanno, A, “Stakeholder Engagement in Regulatory Policy” (2015) Regulatory Policy in Perspective: A Reader’s Companion to the OECD Regulatory Policy Outlook 2015 (OECD 2015)Google Scholar.

⁵⁴ Blanc, F, From Chasing Violation to Managing Risks. Origins, Challenges and Evolutions in Regulatory Inspections (Edward Elgar 2018)CrossRefGoogle Scholar.

⁵⁵ Trevino, L and Nelson, KA, “Managing business ethics: Straight talk about how to do it right” (5th edn, John Wiley and Sons Publishers 2011)Google Scholar pp 24 and 304; Molina, supra, note 44, p 161.

⁵⁶ See, among others, Sunstein, CR, “On the Expressive Function of Law” (1996) 144 University of Pennsylvania Law Review 2021 CrossRefGoogle Scholar et sqq.

⁵⁷ Ayres and Braithwaite, supra, note 35, p 19.

⁵⁸ Gunningham, N, Kagan, RA and Thornton, D, Shades of Green: Business, Regulation and Enforcement (Stanford University Press 2003) 21–22 Google Scholar; see also Kagan, RA and Axelrad, L, Regulatory Encounters: Multinational Corporations and Adversarial Legalism (University of California Press 2000)Google Scholar; Gunningham, N and Kagan, RA, “Regulation and Business Behavior” (2005) Law & Policy 217 Google Scholar.

⁵⁹ Mazar, N and Ariely, D, “Dishonesty in Everyday Life and Its Policy Implications” (2006) 25(1) Journal of Public Policy and Marketing 118 CrossRefGoogle Scholar.

⁶⁰ “Where certain types of misconduct were once inherently wrong, the introduction of a fine may inadvertently specify the financial tipping point at which the costs of reporting misconduct outweigh the moral and social benefits”: Feldman, Y and Lobel, O, “The incentive of matrix: the comparative effectiveness of rewards, liabilities, duties and protection for reporting illegality” (2010) 88(6) Texas Law Review 1182 Google Scholar. In the famous study on the reaction to a monetary fine imposed on parents who were late picking up their child at school, the observation of a significant increase in the number of parents coming late has been explained by the fact that the behaviour that was previously wrong in itself has in fact a price, and this price allowed parents to be comfortable being late: Gneezy, U and Rustichini, A, “A Fine is a Price” (2000) 29(1) Journal of Legal Studies 1 CrossRefGoogle Scholar et sqq On blood donation and on the implication of monetary rewards for social polity generally, see Titmuss, RM, The Gift Relationship: From Human Blood to Social Polity (Pantheon Books 1971)Google Scholar; and more recently Lacetera, N and Macis, M, “Do all material incentives for pro-social activities backfire? The response to cash and non-cash incentives for blood donations” (2010) 31 Journal of Economic Psychology 738 ff CrossRefGoogle Scholar.

⁶¹ On crowding effects see Frey, supra, note 31.

⁶² Nolan, JM et al, “The constructive, destructive, and reconstructive power of social norms” (2007) 18 Psychol Science 429 Google Scholar et sqq.

⁶³ Cialdini, RB, Influence. The Psychology of Persuasion (New York 1984)Google Scholar; Cialdini, RB, Kallgren, CA and Reno, RR, “A focus theory of normative conduct” (1991) 24 Advances in Experimental Social Psychology 201 Google Scholar et sqq.

⁶⁴ Tversky, A and Kahneman, D, “Availability: A Heuristic for Judging Frequency and Probability” (1973) Cognitive Psychology 207 CrossRefGoogle Scholar; Tversky and Kahneman, supra, note 9; Gilovich, T, Griffin, D and Kahneman, D (eds), Heuristics and Biases: The Psychology of Intuitive Judgement (Cambridge University Press 2002)CrossRefGoogle Scholar.

⁶⁵ Hodges, C, Law and Corporate Behaviour. Integrating Theories of Regulation, Enforcement, Compliance and Ethics (Hart 2015)Google Scholar.

⁶⁶ Jolls, C, “Behavioral Economics Analysis of Redistributive Legal Rules” (1998) 51 Vanderbilt Law Review 1653 Google Scholar et sqq; Tversky, A and Kahneman, D, “Belief in the law of small numbers” (1971) 76(2) Psychological Bulletin 105 CrossRefGoogle Scholar et sqq.

⁶⁷ On self-deception and self-serving bias, see Shalvi, S et al, “Justified ethicality: Observing desired counterfactuals modifies ethical perceptions and behavior” (2011) 115(2) Organizational Behavior and Human Decision Processes 181 Google Scholar et sqq; Chugh, D, Bazerman, MH and Banaji, MR, “Bounded ethicality as a psychological barrier to recognizing conflicts of interests” in DA More et al (eds), Conflicts of Interests: Challenges and Solutions in Business, Law, Medicine, and Public Policy (Cambridge University Press 2005) 74 CrossRefGoogle Scholar et sqq.

⁶⁸ While some regulatees are indeed well motivated with a high capacity to comply (which would justify a less intensive intervention), others are motivated but with low capacity to comply; some regulatees are less motivated while characterised by a high capacity to comply and others are less motivated with less capacity to comply, a situation which would justify a more intensive intervention: Black and Baldwin, supra note 38 (both articles).

⁶⁹ F Di Porto and N Rangone, “Proportionality of regulation: what role for cognitive sciences”, paper presented at the annual conference of the International Research Society for Public Management, Hong Kong 2016; see also F Di Porto, “Regolazione, principio di proporzionalità e scienze cognitive”, Federalismi.it (14 February 2018).

⁷⁰ European Commission, Toolbox on Better Regulation (2017) p 85.

⁷¹ The performance of an ad hoc experiment is to be considered the preferred approach, while interventions drafted on the basis of a literature review alone do not avoid ineffectiveness: European Commission, Behavioural Insight Applied Policy (2016) p 17.

⁷² Therefore, if the regulatory problem is a low switching rate, those invited should not be only firms and associations of consumers, but also individual consumers. Inertia bias could also prevent stakeholders from participation in consultation (therefore, the consultation method should be selected accordingly, for instance inviting consumers to seminars, organising online forum, or providing simplified questionnaires).

⁷³ Such as information overload (which could stop people from answering documents which are too long and complicated) or choice overload (which could paralyse people confronted by too many alternatives); overconfidence (which prevents people from neutrally evaluating their own ability or attitude), or confirmation (which leads people to select information which confirms their belief, while not paying attention to a different view).

⁷⁴ For instance, while impact assessment (IA) based on cost-benefit analysis usually assumes people’s rationality, IA should include a risk analysis which takes into account end-users’ biases as a risk to be assessed in terms of probability and effects: Di Porto, F and Rangone, N, “Behavioural Sciences in Practice: Lessons for EU Policymakers” in A Alemanno and A-L Sibony (eds), Nudge and the Law: A European Perspective? (Hart 2015) 33 Google Scholar.

⁷⁵ Di Porto and Rangone, supra, note 74, 30–31.

⁷⁶ On weaknesses and strengths of traditional and cognitive-based regulatory strategies see Di Porto and Rangone, supra, note 74, 55–56.

⁷⁷ F Di Porto, La regolazione degli obblighi informativi. Le sfide delle scienze cognitive e dei big data (Editoriale Scientifica 2017) 126 ff.

⁷⁸ This distinction has been pointed out in 2015 by Di Porto and Rangone, supra, note 74, 36 ff., where a classification of types of nudging and empowerment is given, along with many examples). Cass R Sunstein introduced the similar notion of “educative nudges” in The Ethics of Influence: Government in the Age of Behavioral Science (Cambridge University Press 2016) first mentioned at p 16) and T Grüne-Yanoff and R Hertwig that of “boost”, in “Nudge versus boost: How coherent are policy and theory?” (2016) 26(1–2) Minds and Machines 149 et sqq.

⁷⁹ C Codagnone et al, “Study on online gambling and adequate measures for the protection on consumers of gambling services”, Final Report for the European Commission (2014) pp 20–21 and 61–62.

⁸⁰ McNeil, BJ et al, “On the elicitation of preferences for alternative therapies” (1982) 306 New England Journal of Medicine 1259 Google ScholarPubMed et sqq. How many alternative options are offered is also an issue: Tversky, A and Shafir, E, “Choice under conflict: the dynamics of deferred choice” (1992) 3(6) Psychological Science 358 Google Scholar; Schwartz, JAand Chapman, GB, “Are more options always better? The attraction effect in physicians’ decisions about medications” (1999) 19(3) Medical Decision Making 316 Google Scholar.

⁸¹ Cabinet Office, Applying Behavioural Insights to Reduce Fraud Error and Debt (The British Psychological Society 2012); see also M Hallsworth et al, “The Behavioralist as Tax Collector: Using Natural Field Experiments to Enhance Tax Compliance” (2014) no 20007 NBER Working Paper; Blumenthal, M, Christian, C and Slemrod, J, “Do Normative Appeals Affect Tax Compliance? Evidence from a Controlled Experiment in Minnesota” (2001) 54(1) National Tax Journal 125 CrossRefGoogle Scholar.

⁸² For instance, the introduction of a given choice for architectures in canteens or supermarket in the well-known example described in the best seller by Thaler, RH and Sunstein, CR, Nudge. Improving Decisions about Health, Wealth, and Happiness (Yale University Press 2008) 67 Google Scholar.

⁸³ LL Shu et al, “Signing at the Beginning Makes Ethics Salient and Decreases Dishonest Self-Reports in Comparison to Signing at the End” (2012) 109 Proceedings of the National Academy of Sciences 15197 et sqq; US Social and Behavioral Sciences Team, Annual Report (2015) 15.

⁸⁴ Mittone, L, “Dynamic Behaviour in Tax Evasion: an Experimental Approach” (2006) 35(5) The Journal of Socio-Economics 813 CrossRefGoogle Scholar et sqq.

⁸⁵ Kastlunger, B et al, “Sequence of audits, tax compliance, and taxpaying strategies” (2009) 30(3) Journal of Economic Psychology 407 CrossRefGoogle Scholar et sqq.

⁸⁶ The personal reference point is a psychological criterion or heuristic that guides decision-making processes by setting a standard against which to compare the choice: Kahneman, D and Tversky, A, “Prospect theory: an analysis of decision under risk” (1979) 47(2) Econometrica 263 CrossRefGoogle Scholar.

⁸⁷ “Recently created business should be (...) first given a chance to improve (…) so as to promote a culture of openness on their side. (…) Businesses which have a history of compliance should be gradually checked less often (their risk level being rated lower) – inspectors should also generally start with improvement notices or (in the case of lesser violations) verbal warnings, except in cases of major, imminent hazard” (OECD, Regulatory Enforcement and Inspections (2014) pp 28 and 34, inspired by the theory of responsive regulation developed by Ayres and Braithwaite).

⁸⁸ Education, persuasion and dialogue are strategic in order to gain and maintain compliance of most taxpayers; “however, in the case of voluntary and repeated non-cooperation, severe economic and legal sanctions come into operation”: Kirchler, E and Hoelzl, E, “Modelling Taxpayers’ Behaviour as a Function of Interaction Between Tax Authorities and Taxpayers” in E Elfers, P Verboon and W Huisman (eds), Managing and Maintaining Compliance (Boom Legal Publisher 2006) 5–6 Google Scholar. At the same time, public authorities should react differently to “active tax fraud by manipulation of the balance sheet, and passive tax evasion when taxpayers forget to report particular income components”, according to the responsive regulation approach: Feld, LP and Frey, BS , “ Tax Compliance as the Result of a Psychological Tax Contract: The Role of Incentives and Responsive Regulation” (2007) 29(1) Law & Policy 109 CrossRefGoogle Scholar.

⁸⁹ In the tax sector, it has been demonstrated that more auditing can backfire (while compliance increases until a certain auditing level, it decreases beyond that level). The reduced compliance is due to distrust created in taxpayers and by the perception that the tax authority and its enforcement actions are excessive and unfair: Mendoza, JP, Wielhouwer, JL and Kirchler, E, “The backfiring effect of auditing on tax compliance” (2017) 62(11) Journal of Economic Psychology 284 CrossRefGoogle Scholar.

⁹⁰ For instance, the “inspection holiday” puts a frequency cap on inspections for businesses with track records of accountability which are rewarded with fewer inspections focusing controls on “bad performer” firms: R de Boer, Regulatory Enforcement and Inspections. Dutch Approach, October 2012). A similar recommendation is formulated by the OECD, which suggests limiting “re-inspection of the same issue by different inspectorates in the same business within a given period (eg one year), except if problems have been identified in the first visit”: OECD, supra, note 6, 44.

⁹¹ Cialdini (1984), supra, note 63; Nolan et al, supra, note 62, 249 et sqq.

⁹² The Food Hygiene Rating Scheme, which has worked successfully in England, Wales and Northern Ireland, was launched in 2010, in New York City in 2010, in Los Angeles in 1998.

⁹³ Data from 2013 shows that “the majority of these systems are mandatory (Denmark, Canada (Toronto), USA (New York, Los Angeles, San Diego, Ohio, Kentucky), Singapore, and New Zealand, with semi-voluntary systems existing in the UK (England, Wales, Northern Island, Scotland)”: NSW Food Authority, Progress of “Scores on Doors” (Food Hygiene Rating Scheme) in NSW (June 2013) CP069/1306.

⁹⁴ More than 20 US states have shaming lists on the internet, eg New York, <www.tax.ny.gov/enforcement/warrants.htm> accessed 6 September 2018; Florida <floridarevenue.com/taxes/compliance/Pages/delinquent_taxpayer.aspx>, accessed 6 September 2018.

⁹⁵ For instance, the UK HM Revenue and Customs published in 2013 a photo gallery of the Most Wanted tax fugitives: see <www.gov.uk/government/news/hmrcs-most-wanted-gallery-of-tax-fugitives-published-as-another-caught>, accessed 6 September 2018.

⁹⁶ Establishing whether targeted transparency based on a positive framing is more effective than a negative one is something that should be established through ad hoc cognitive experiments.

⁹⁷ It is important to underline that none of the abovementioned theories on compliance suggest a new model of human behaviour; alternatively to building an overarching model of man, Frey, supra, note 31, at 124 suggests leaving “the partial models including some specific psychological effects as they are, and regulates the task of choosing the appropriate model to the problem at hand”.

⁹⁸ It is not the purpose of this paper to determine whether the preferred theories are those that build on the Simon’s notion of bounded rationality (eg Tversky and Kahneman, supra, note 9; Thaler and Sunstein, supra, note 82; and, among others, Bobb, R and Pildes, RH, “How behavioural economics trims its sails and why” (2014) 127 Harward Law Review 1612)Google Scholar, or the approaches which “presume rationality when evidence [of biased behavours] is lacking”: Schwartz, supra, note 3, at 1405–1406; in this line of thinking see also, among others, Frey, supra, note 31). However it seems to be unquestioned that cognitive findings lead to a richer and “more psychological model of human behaviour” (ibid, 118).