Public, Nonprofit, and For-Profit Sector Regulatory Approaches in Third-Party Regulatory Administration

Abstract

Many contemporary regulatory programs rely on third-party organizations to fulfill monitoring and enforcement functions. Third-party regulatory designs introduce complexity and potentially conflicting incentives that can impact program delivery. This article examines how regulatory program outputs are shaped by third-party administrators through an investigation of the organizations charged with administering US organic food regulations. Based on the notion that third-party arrangements draw attention to administrator organizational characteristics, the article asks: To what extent does sector (public, nonprofit, for-profit) affect third-party administrators' regulatory approaches in the administration of uniform regulatory standards? A secondary analysis explores an economic facet of dimensional publicness among nonprofit third-party administrators. The study draws on regulatee survey data and uses multilevel analysis to account for how regulatory approaches vary across third-party administrator characteristics, as well as according to respondent-level attributes. The findings indicate that little systematic variation in regulatory approaches can be attributed to administrator sector. The facet of regulatory approach in which sector appears to play a role is found in public third-party regulatory organizations' lower provision of technical assistance, when compared to their for-profit counterparts. The article discusses explanations for the limited relationship between third-party sector and regulatory approaches and suggests future research for better understanding the linkage between regulatory program design, administrator organizational characteristics, and program outputs.