Human Relations, Vol. 48, No.5, 1995

Motivational Underpinnings of Command-and-Con­trol, Market-Based, and Voluntarist Environmental Policies

David R. Karpl,3 and Clark 1. Gaulding2

Historically, regulatory command-and-control schemes have dominated the environmental policy process. Recently, market-based incentives and voluntarist programs have begun to compete with regulatory policies. We argue in this article that policyrnakers must distinguish these strategies by their motivational underpinnings. While each strategy attempts to achieve the same goal, behavioral or organizational change that reduces pollution and/or provides environmental protection, each strategy is distinct in its means. We discuss how command-and-control capitalizes on fear, market-based incentives capitalize on greed, and voluntarism on one's sense of social responsibility. We discuss the implications of choosing each of these policy alternatives by drawing on the insights of "social dilemmas" research that analyzes situations in which the individual and the collective good are in conflict.

KEY WORDS: social dilemmas; environmental policy.

INTRODUcnON

The ongoing national dialogue about the environment clearly suggests that we are in the midst of significant policy change. To wit: Vice President Gore's (1992) very personal perspective in Earth in the Balance; the chal­lenging scope of the U.N. Conference on Environment and Development in Rio de Janeiro, 1992; The Environmental Protection Agency: Asking the Wrong Questions by Landy, Roberts, & Thomas (1990); the promotion of market-based strategies in the EPA-supported Project 88 (Stavins, 1988); the search for sustainability in Beyond the Limits by Meadows, Meadows,

IDepartment of Sociology, DK-40, University of Washington, Seattle, Washington 98195. 2Graduate School of Public Affairs, DC-l3, University of Washington, Seattle, Washington 98195.

3Requests for reprints should be addressed to David R. Karp, Department of Sociology, DK-40, University of Washington, Seattle, Washington 98195.

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440 Karp and Gaulding

& Randers (1992); and Daley & Cobb's (1989) quest for environmentally sensitive economics and ethics in For the Common Good. Although this sampling is limited, it indicates the unprecedented number of people asking critical questions about the past and offering prescriptions for the future.

Much of the policy discussion has to do with the efficacy and relative advantages of different approaches to contemporary environmental problems: command-and-control, market-based incentives, and voluntarist strategies for ameliorating environmental problems. Although command-and-control strategies have historically dominated the field, particularly in public agencies such as the United States Environmental Protection Agency, alternatives are being sought as both the real and relative success of traditional policies di­minish in the face of growing environmental concern.

We argue in this article that policymakers must distinguish these strategies by their motivational underpinnings. While each strategy attempts to achieve the same goal, behavioral or organizational change that reduces pollution and/or provides environmental protection, each strategy is distinct in its means. We elaborate below how command-and-control capitalizes on fear, market incentives capitalize on greed, and voluntarism on one's sense of social responsibility. Furthermore, motivational criteria must be used to distinguish the incentives of corporate actors from those of individuals. For example, a voluntarist strategy, promoting social responsibility, may be used for both individual and corporate actors, but the rewards for good citizen­ship are quite different for each. For individuals, they are primarily psychological and social (e.g., enhanced self-esteem, social recognition), whereas corporate actors benefit economically (e.g., expanded customer base, increased customer loyalty). In this article, we argue that one strategy has been relied upon too heavily, and is no longer sufficient for dealing with the variety of environmental issues currently faced. This article at­tempts to illuminate central differences between environmental policy alternatives and the potential utility of the lesser-used strategies.

ENVIRONMENTAL POLICY IN THE 19905

The substantial achievements of the past are not sufficient for the future because the old solutions cannot effectively address current environ­mental problems. The definitions of environmental problems themselves are changing. Environmental regulation was initially written at a time when environmental problems were conceived as localized "end-of-pipe" emis­sions largely attributable to industrial activity (Kraft & Vig, 1990). Over time, the local character of problems has given way to regional, and even global definitions. Local issues have not disappeared, but problems such as global warming and ozone depletion have been added to the mix. Simi­

441 UnderpinniDgs of Environmental Policies

lady, the protection of single species from extinction has given way to the perspective of ecosystem management (Wilson, E. 0., 1993).

The tools that seemed to work when we were concerned with a limited number of pollutants discharged from a limited number of pipes and stacks are inadequate today. Command-and-control policies struggle in the face of scarce enforcement resources directed at an increasing number of problems and a diffusion of responsibility for those problems. As Kathleen McGinty, director of the White House Office of Environ­mental Policy, recently noted, many are "tired of command and control government" (New York Times, 1994). A broader array of policy alter­natives and a more comprehensive view of environmental issues are es­sential parts of the ecosystem approach. A recent and important example of this theme appears in the draft supplemental environmental impact statement prepared in conjunction with the current litigation over old-growth forests in the Pacific Northwest of the United States (Wilson, T., 1993). Decisions about forest management must take into account not just the spotted owl, but other indigenous species such as salmon. Further, salmon cannot be protected just by controlling river basin forestry practices or just by regulating discharges to rivers or just by regulating commercial and sports fisheries or just by regulating water flow through hydroelectric dams; all these and other dimensions must be included if solutions are to have a sophistication that matches the complexity of the problem.

Alternatives to command-and-control regulatory schemes have arisen to broaden the scope and effectiveness of environmental protection poli­cies. Both market-based and voluntarist policies have gained recent attention (Anderson & Leal, 1991; Hahn, 1989; Ehrlich & Ehrlich, 1991) and show some promise for addressing these more complex environmental issues. However, they are not cure-ails, and it is vital to place each into an integrative context to help distinguish the foundations and potential for each to accomplish its mission.

Our premise is that the considerable body of knowledge and theory about human behavior has an increasingly important place in the environ­mental policy process. This is not to suggest that policy formulation has been totally devoid of insight about human behavior, just that the consid­eration should be made more substantial and more explicit. Nor is it to suggest that the engineers, natural scientists, lawyers, and economists who have dominated the "profession" have outlived their usefulness; rather, it is to suggest that we need the additional knowledge about human behavior available from sociology and psychology to help distinguish among today's policy alternatives.

444 Karp and Gaulding

icy formulation. Before examining the underlying motivations of the policy alternatives in greater detail, it is necessary to describe the theoretical framework of social dilemmas.

Social dilemmas are narrowly defined as situations in which autono­mous individuals act in their own rational self-interest, yet the collective outcomes of these independent actions threaten misfortune to all. This so­cial situation has captured the attention of researchers from a host of disciplines including sociology, psychology, economics, political science, and anthropology. At the root of a social dilemma we find a conflict between the pursuit of individual and collective goods. The irony of this conflict is that the pursuit of self-interest, which is such a central tenet of free-market capitalism, may ultimately lead not only to diminished collective outcomes, but diminished outcomes for individuals who had been rationally pursuing their own best interests.

Researchers have theorized the social dilemma a priori as a dichoto­mous choice between cooperation with the group or defection from the group in the service of self-interest. In a literature review by psychologist Robyn Dawes (1980), a formal definition of the social dilemma is offered: "The social payoff of each individual for defecting behavior is higher than the payoff for cooperative behavior, regardless of what the other society members do, yet all individuals in the society receive a lower payoff if all defect than if all cooperate (p. 170)."

The social dilemmas formulation is abstract, but a myriad of environ­mental issues substantively illustrate the social dilemma idea for both individual and corporate actors. Uttering or illegal dumping relieves oneself of garbage more easily than searching for a garbage can, so there is a posi­tive incentive for littering. Yet the end result is an unappealing and maybe toxic environment for all. Therefore, while the individual benefits from lit­tering, the collectivity does not. Driving a car is individually rewarding in terms of convenience, yet if everyone does so, the collective consequences range from traffic jams to smog and global warming. Timber companies may have a profit incentive to cut as many trees as possible, but the col­lective consequences could be dramatic for biodiversity and the maintenance of a carbon sink. While each timber company may wish for collective restraint, none could restrain its overconsumption individually in a competitive market without risking loss of market share if others did not respond in kind.

Garrett Hardin (1968) popularized the conception of the social di­lemma by describing the situation as a "tragedy of the commons." In his conception, the incentive structure surrounding what were traditionally called common lands inevitably leads individuals to maximize their own utilization of the land without regard for the collective consequences of

447 Underpinnings of Enmonmental PoUcles

But the eat has its limitations: it doesn't drive as far or as fast; it has no past record of performance; it's smaller than most other vehicles on the road making it less safe in a collision, etc. Particularly worrisome is the fact that if enough of them are not sold, recharging stations may not ma­terialize, and the model will be discontinued, leaving you with a car nobody can fix or find parts for. Not only is this outcome bad for you, but also it does little to reduce air pollution because too few electric cars are pur­chased to make a difference. The choice of contributing to the collective good when others fail to do so is appropriately known as the "sucker's payoff' (Rapoport, 1967; Bruins et al., 1989). Therefore, apparently, it is not in your best interest to buy this car. The eventual costs to you person­ally outweigh the benefits, which can be defined simply as your own minuscule contribution to enhanced air quality.

The environment would be better off, however, if people began buy­ing electric cars. Collectively, we pay the price for our failure to make these environmentally sound purchases. Therefore, you might be content buying an electric car as long as millions of others do so, and the air quality was measurably improved. Better still, you would rather have thousands of other people buy electric cars, taking the risk on this new technology, while you buy a conventional vehicle. This attractive option is called "free-riding" (Olson, 1965), and is indicative of one's willingness to enjoy the benefits of others' cooperation without paying the cost. Finally, an additional con­sideration is the uncertainty of the future environmental consequences compared with the certainty of cost-savings by avoiding this expensive pur­chase.

From the perspective of the anonymous and autonomous decision­maker, it does not make sense to purchase the electric eat. However, the aggregated consequence is collectively damaging. Because of an inherent conflict of motives between what is best for the individual and what is best for society (the social trap), and between what is best in the present and what is best in the future (the temporal trap), the social dilemma has no straightforward solution. Figure 1 illustrates this conflict by presenting a two-by-two payoff matrix in which each quadrant is split (diagonally) be­tween decision outcomes for self and for others. As self and others attempt to free ride, the worst of the four collective outcomes (self + others) re­sults.

Research on social dilemmas has a clear agenda. It attempts to dis­close the structural arrangements and psychological motivations that prompt individuals to repeatedly choose the collectively damaging option and it attempts to find solutions that counteract this tendency. Social di­lemmas researchers primarily carry out their research in university laboratories with small groups of subjects who are confronted with a social

448 Karp and Gaulding

dilemma situation. Although the findings from the study of social dilemmas in the laboratory cannot be directly applied to real world situations which are frequently more complex (yamagishi, 1986; Hechter, 1990), we believe the findings from this research do provide a useful heuristic to guide policy decisions.

SOCIAL DILEMMAS AND POLICY FORMULATION

Theoretical solutions to various social dilemmas correspond closely to the major policy alternatives being considered for contemporary envi­ronmental problems (i.e., command-and-control, market-based incentives, and voluntary reductions). All solutions essentially boil down to changing the incentive structure of our thought experiment so that we enhance the likelihood of individual actors making the collectively beneficial choice, as­suming we know what that choice is.

The practical effect is that the policy instrument (regardless of which one we apply) must change the set of options confronting each individual or corporate actor. A littering example illustrates the problem of incentive structures. Before anything is done about the problem, each of us has a choice: throw the trash away without much cost, or dispose of it "properly," but at some personal cost (e.g., time or money). Absent constraint or cul­tural stigma, convenience will likely motivate most of us to take the least costly option - give it a toss! But the collective outcome of a littered land­scape is also likely to produce support for some kind of social intervention. For instance, assume that a hefty fine is imposed on anyone caught littering, which is a type of command-and-control policy. Now the choice confronting each of us is different than it was before. We must now choose between proper disposal at some personal cost, or continued littering in an attempt to avoid the personal cost of disposal, but at the risk of being caught and fined. In behavioral terms, a new motivational force comes into play: the fear of getting caught. Note also that greed may still be involved, but its direction has now been reversed. The hefty fine compared to the modest cost of proper disposal now favors proper disposal. Thus, the intervention has effectively changed the incentive structure, presumably in a way that will cause each of us to make the choice that contnbutes to the collective good.

We arbitrarily chose to use the command-and-control policy instru­ment in the above example. We could just as easily have chosen a market incentive scheme or the voluntary reduction alternative. Each of them can be devised with incentives to change individual preferences in favor of non­littering, but each is different in terms of the underlying motivation involved. Consideration of these differences may very well clarify the policy

450 Karp and Gaulding

subjects will COOpIrate more often when they can be identified (Messick & Brewer, 1983).• Otherwise, they will shrink from their social responsi­bility under a cl01if anonymity. As the pool of polluters becomes larger, the ability to identi each one becomes more difficult.6

Consider the major federal regulatory developments since 1980 in the United States: (1); more than 1200 abandoned hazardous waste sites have been placed on orl' nominated for the National Priority list (NPL) created

lunder Superfund', in December, 1980, and the number of potentially re­sponsible parties associated with these sites is substantially larger, as is the approximately 30,qoo....35,000 additional sites identified but not yet on the NPL (Bennett, 1~3); (2) the number of air pollution sources traced by EPA under the Clean Air Act has increased from approximately 27,000 in 1985 to roughly 3~,OOO in 1993 (Kral, 1993); and (3) over 23,000 facilities filed over 80,000 forms in 1991 to satisfy the reporting requirements of the Toxies Release Inventory, established by EPA pursuant to the enactment of the Emergency! Planning and Community Right-to-Know Act of 1986 (EPA, 1993). Whqn environmental regulations over motor vehicle mainte­nance, wood stoves, outdoor burning, and non-point sources under the Federal Clean W*er Act are added on, the numbers are multiplied many times over. As a ,ractical matter, it would not be an exaggeration to say that the regulated luniverse has been entirely redefined. Where it was once circumscribed prinjJ.arily by an identifiable industrial sector, it now traverses both time and plafe as environmental impacts are measured as a function of both historical i accident and habitual individual behavior. In contrast, the total budget Of the EPA has grown from $5.3 billion in 1981 (EPA, 1982) to $6.7 billiin in 1992 (EPA, 1992c), an increase of only 26% over the 12-year perio . While the EPA's budget has increased only modestly, its purview has e anded exponentially.

These facts I ad to the inescapable conclusion that the anonymity fac­tor, which tends tp undermine the effectiveness of command-and-control regulatory schemes, has become more pronounced over the time span cov-

SIn a related traditiO; the effect of anonymity has produced "social loafing" in which individuals perform boptimally when their effort is masked by that of the group. For example, ~dividuals g less hard on a rope when in a group than when alone (Harkins & Szymanski, 1987). I

fiThe universality of ~ group size hypothesis has been called into question by Marwell and Oliver (1993). They 'ghtly argue that increasing group size will increase the likelihood of cooperation of some members when the group is heterogeneous in terms of individual resources or potenti benefits of cooperation because the wealthier or more interested will be the object of soci activism. Thus, under conditions where the provision of a good needs only a fraction of ¥heterogeneous group to contribute, the larger group size may be beneficial. Neverthel ,the anonymity problem must also be overcome in this case.

7Superfun d's fonnal ti e is the Comprehensive Environmental Responses, Compensation, and liability Act of 1980'1

451 Underpinnings or Enmonlnental Policies i I

ered by these data luse the scope of regulatory responsibilities has in­creased far beyond t e monitoring capacities of regulatory agencies. In a time of budget defic ts and severe competition among a variety of social ills, it is perhaps bes not to limit environmental protection to command­and-control solutions I, alone.

MARKET-BASED ~'PROACHES An alternative licy approach to contemporary environmental prob­

lems involves the use of market forces to alter institutional and individual incentives toward po ution and pollution-prevention. While command-and­control regulatory a roaches depend on the capacity to catch and punish polluters after the f ,market-based approaches encourage pollution re­duction before the f ct. Market approaches do not obviate the need for regulatory oversight, ut they alter the incentive structure potentially in­creasing both effi iency and the likelihood of compliance. In a market-driven enviro ent, regulatory costs should diminish, though they will not disappear.

Market approa hes contrast with command-and-control approaches by offering positive r ards for cooperation rather than punitive sanctions for defection. Oliver (1980) argues that punitive sanctions, under certain conditions, do not wo k as effectively as positive incentives because positive incentives will attract the most interested into cooperation, i.e., those that stand to profit the m t from a cooperative outcome. This is an efficiency that is not found in mmand-and-control mechanisms which, while a de­terrent, may also inv ke resistance, illicit or litigious. In social dilemmas research, cooperation rates have been found to be higher utilizing positive incentives rather th punitive incentives (Komorita, 1987; Komorita & Barth, 1985). ,

Under comman~-and-controlmechanism, everyone has an incentive to free ride, thus ev ryone must be monitored. With market-based ap­proaches, all comp . s would have an incentive to comply partly because capital improvements better the companies' position in the long-term mar­ket. The same logic pplies at the individual level. A popularly discussed market-based approac to global warming is the imposition of a carbon tax (or BTU tax). H re, individuals are not forced by regulatory require­ment to reduce their nsumption of gasoline and other CO2 sources, but are faced with an alt ed incentive structure. Where it was once beneficial to free ride (almost iterally), it now becomes beneficial to change one's consumptive behavio The consequences now favor purchasing a fuel-ef­ficient vehicle, riding mass transit, or finding ways to drive fewer miles, etc. The carbon tax s ds in direct contrast to increases in CAFE stand­

452 Karp and Gaulding

ards, a classic command-and-control approach. With a carbon tax. it is de­mand, not regulatioa, that would drive automobile makers to produce more fuel-efficient cars. ~nlightened self-interest works for both buyers and sell­ers: it will be cheaper for buyers to consume less gas and produce less C02, and sellers will profit by meeting demand for greater fuel efficiency. The critical distinction is found in the timing of the strategy. CAFE stand­ards do nothing t(j) alter market conditions, thus automakers resist regulation tooth and nail. The tax forces no one to change, but creates a climate in which change is likely because it is consistent with self-interest.

Market-based ~trategies have an advantage over command-and-con­trol approaches because they can reduce pollution more efficiently. Command-and-control strategies are almost always designed to impose uni­form requirements On everyone but, despite the parsimony of uniformity, ,.. it creates an ineffici~ncy. This inefficiency arises because the incremental marginal cost of retving each pound of pollution is different for every source, yet the co and-and-control regulation requires everyone to achieve the same proportional level of control or numerical target. Thus, it may cost me $10 to remove my last required pound of emissions, whereas you might be able t~ remove an additional pound beyond what is strictly required for $6. If SQ, the command-and-control inefficiency, in this exam­ple, is represented ~y the $4 difference between these two figures. A market-based tradin~ scheme creates an opportunity to avoid or recapture the $4 of inefficiency (minus any transaction costs, which can be real and must be taken into a~unt): I ask you to control one pound less; you spend an additional $6, an I save $10; you agree to do this if I will reimburse you the $6 it will CO t you, and we are even. And, if you are smart, you'll force me to admit that I'm still $4 to the good and will ask me to share the "profit" with you~ maybe SO/50. The net result is that everyone is better off, and the public g~ts the same amount of protection as under the com­mand-and-control structure, You control an extra pound and spend $6 doing it, but I give y~u $8 for your effort; therefore, you are better off by $2. I, on the other hand, am out the $8, but if we hadn't done this, I would have had to spend sib controlling one more pound. Therefore, I am better off by $2 as well. In ~eory, competition in our two markets will force us to share the cost sa~gs with our consumers, so they not only get the same amount of environm ntal protection, but they also benefit economically.

The idea of us' g market forces to achieve social goals is anything but new. Yet, for a society so strongly devoted to entrepreneurial free-mar­ket capitalism as is tbie United States, we appear curiously reluctant to use it as an instrument of social policy. Charles Schultz (1977) detailed some of the reasons for thi, seeming paradox in his benchmark essay The Public jJ. Use of Private Interestj Some of them deserve mention here.

453 UnderpinniDgs of EnviroomenW PoUdes

The theory of free markets includes an assumption that all the players have perfect information. Thus, while everyone, in theory, would choose the least costly alternative under a market-based scheme, be it tradable discharge permits or carbon-taxing gas guzzlers, not everyone can or does perform the cost/benefit analysis. This is particularly true when returns on investment take years. For market-approaches to work, all parties must have very clear information on the costs and benefits of all of the alterna­tives over time. Clearly, it is not easy or cheap to acquire this level of information for every transaction.

Perhaps the greatest obstacle to the idea of the market as part of the solution is confusion about exactly what the market is being asked to do. Once a problem has been identified, three steps must be taken to resolve it: (1) a decision to act (e.g., improve air quality); (2) the establishment of a specific goal (reduce C02 emissions to x level); and (3) the selection and implementation of a means to reach the goal (e.g., CAFE standard or car­bon tax). It is generally recognized that the decision to act is a product of the political process, and that we are increasingly interested in market­based strategies as a means. Confusion exists regarding the establishment of goals. While economists point out that markets can be used to set social goals as well as to achieve them, our society mistrusts markets as a way to set these goals (Stavins, 1991; Schultz, 1977). Therefore, if the public is to embrace the use of market-based incentives, it must be made clear that they are being employed as a mechanism to help meet socially and politi­cally defined goals, not to set the goal in the first place.

The acid rain proviskms of the 1990 Clean Air Act Amendments il­lustrate this point (EPA, 1990). Title IV - Acid Deposition Control creates a market framework for the purchase and sale of discharge allowances (i.e., permits) for acid rain precursors. Differences in the marginal costs of con­trolling emissions from one coal-fired power plant to the next create an economic incentive for the affected utilities to "re-assign" allowances in a way that reduces the overall cost of control for the utility industry as a whole, i.e., a more efficient outcome. However, the important distinction here is that the tradable permit market does not determine what the al­lowances will be in the first place. Congress set that goal explicitly in the language of the act. Section 401(a). Findings, delineates congressional con­cern and the reasons to take action. Section 401(B), Purposes, states that "the purpose of this title is to reduce the adverse effects of acid deposition through reductions in annual emissions of sulfur dioxide of ten million tons . " and ... of nitrogen oxides emissions of approximate two million tons [italics added]" (101st U.S. Congress, 1990, p. 195). Congressional in­volvement in this level of technical detail gives rise to a completely different

455

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Underpinnings 01 Environmental Policies

jorities see environmental problems as serious, worsening, and increasingly threat­ening to human well-being; strong and growing majorities support government action to protect environmental quality; and majorities generally side with environ­mental protection over economic growth as well as indicate a personal willingness to pay the costs of such protection. Perhaps the most important trends are the public's increasingly positive orientation toward environmentalism and the growth in both political and consumer actions on behalf of environmental protection (p. 657).

However, social scientists also know that very general measures of attitudes are not very predictive of specific behaviors (Ajzen & Fishbein, 1980). Voluntarist policies directed at changing specific behaviors must carefully measure attitudes at the appropriate level of specificity. For ex­ample, an individual's strong concern about the nation's energy situation does not necessarily translate into specific energy conserving behaviors such as purchasing an energy efficient refrigerator (Stem, 1992). Stem cautions that the environmental attitude-behavior relationship is strongest only when measured at the same level of specificity and when behaviors are easy to perform. He also notes the various environmental behaviors are not that well correlated and that self-reported behaviors are correlated more with attitudes than with actual behavior. In sum, voluntarist strategies that raise general environmental consciousness will not necessarily yield specific behavioral changes.

Appeals to social values have been extensively studied by social di­lemmas researchers (Messick & McClintock, 1968; Kuhlman & Marshello, 1975; Kuhlman et al., 1986; Liebrand, 1986; Beggan, Messick & Allison, 1988). Here we are not concerned about general attitudes about the sub­stantive question, namely the environment, but attitudes concerning an individual's relationship to others in the social world, i.e., how much an individual is likely to contribute voluntarily to the collective good. These findings suggest that the success of voluntarist policies may vary depending upon to whom they are targeted. Some people are consistently more likely to cooperate in a social dilemma than others. Social psychologists have demonstrated that many people will cooperate in a social dilemma, but that a significant percentage of individuals will simply pursue their own self-interest in spite of the collective outcome. Researchers have consis­tently found altruists, but they tend to be a small fraction of the population. More commonly, cooperators are individuals who maximize beneficial out­comes for both self and others, in contrast to altruists who maximize beneficial outcomes only for others. Importantly, some evidence exists for the ecological validity of the laboratory measures of social orientation (Bem & Lord, 1979). Voluntarist policies may appeal to cooperators and altruists, but must carefully overcome the proclivities of many to free ride.

456 Karp and GauldJDg

Voluntarist policies that rely on normative pressure are subject to the same constraint as command-and-control strategies. Both policies must con­front the problem of anonymity. The people that can have the greatest effect on overcoming this anonymity are those with whom the polluter is closely identified: the people whose opinion the polluter cares most about. Using the same hypothesis of group size, we find that group identification is strongest among the smallest, closest circle and diminishes as the group becomes larger (Kramer & Brewer, 1984; Dawes et al., 1988). It is among the closest circle that we typically find the best communication networks (Michener, DeLamater & Schwartz, 1986) and the greatest opportunity for normative influence (Kaplan, 1987). Some have argued that the informal sanctioning systems intrinsic to voluntarism are more efficient than the for­mal sanctioning systems of command-and-control (Heckathorn, 1988). An association of timber companies may be able to voluntarily refrain from clear-cutting, or lobster fisherman may restrain their harvests in a local bay because these groups are small in number and relatively visible (Acheson, 1975). But in large group dilemmas, such as those including all of the own­• ers of cars that get less than 40 mpg or all of the users of CFCs, the individual polluter is certainly lost in the crowd.

Voluntarist policies based on normative pressure also face a problem of trust. People may believe that pollution reduction is a good thing and may be even willing to make a sacrifice to achieve this end, but will not cooperate unless they believe others will do so as well (Pruitt & Kimmel, 1977). As discussed earlier, this is called the sucker effect: we become trapped into noncooperation with collective goals because no one wants to feel taken advantage of. Voluntarism works best in an atmosphere of trust. Unless people are motivated completely by altruism, in which case they usually cooperate without regard to what others are doing or they assume that other will cooperate, they will need to have some assurance that their sacrifices will be rewarded by at least some social recognition, if not a guar­antee that their efforts will contribute to the cause in some meaningful way (Yamagishi, 1986). Without a formal system of regulation and enforce­ment, such guarantees can be difficult to establish.

The logic of social dilemmas suggests that we may experience only limited success from using voluntaristic policies. One theory argues that a history of reliance on regulatory solutions to foster cooperation undermines the potential for voluntarism. Taylor (1987) argues that many societies may have become dangerously reliant upon monitoring and sanctioning systems; "The state . " weakens local communities in favor of the larger national society. In doing so, it relieves individuals of the necessity to cooperate voluntarily among themselves on a local basis, making them more depend­ent upon the state" (p. 167). Yamagishi's (1988b) cross-eultural experiment

UnderplnniDp of Enrironmenlal PoUdes 457

gives some support to Taylor's claim. In this study, Japanese society is as­sumed to have a higher degree of monitoring and sanctioning than American society. Subjects from each society were confronted with social dilemma situations under two conditions, with sanctioning systems and without. With sanctioning systems, Japanese subjects cooperated more than the American subjects. Surprisingly, without sanctioning systems, American subjects cooperated more often than did the Japanese. Potentially, the Japanese are more dependent on sanctioning systems than Americans for engaging in cooperation because historically Japanese culture has relied upon sanctioning to a much greater extent. Nevertheless, United States' environmental policy is largely driven by command-and-control. Thus, we are potentially faced with a difficult transition period from regulatory re­liance to voluntarism, and we should be cognizant of this challenge.

One voluntarist program that is illustrative of some of these issues is the "33/50" Program (EPA, 1992a). Instituted by the EPA under William Reilly, the program seeks commitments from American companies to vol­untarily reduce discharges of 17 specifically-identified toxic compounds; the goal was a 33% reduction from 1988 levels by the end of 1992 and an overall 50% reduction by the end of 1995. Results to date are encouraging. In New York, where the state is tracking reductions as part of its own toxies reduction program, pollutant release/transfer dropped from 69 mil­lion pounds in 1988 to 36 million pounds in 1990. In the Midwest, a group of 26 companies and McConnell Air Force Base have committed collec­tively to reduce discharges by more than 90% by 1995. While selective, these two instances clearly indicate that some companies are willing to make commitments that go beyond the 1995 goal and to achieve actual reductions well in excess of the interim 1992 target of 33%. Overall, the 1992 target was met a full year ahead of schedule (EPA, 1993), and the number of companies volunteering to participate has continued to increase: from 236 in July 1991, to 734 in February 1992, and to 1135 in March 1993. In addition, companies choosing to participate in 33/50 have achieved greater reductions in release/transfer of the 17 toxic chemicals than com­panies choosing not to take part: 40% vs. 27%, respectively. Finally, appeals to participate have been more effective with larger companies than with smaller ones: 60% vs. 10%.

Responses from participating companies indicate that their motives range from their own recognition of their responsibilities as corporate citi­zens (altruism) to their appreciation for an opportunity to gain "formal recognition for their efforts" (social recognition). EPA (wittingly or unwit­

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tingly) has attempted to address the identifiability problem by first identifying the top 600 dischargers of these 17 chemicals out of a pool of 6000 companies. While all 6000 were invited to join the program, extra

459 Underplnnings or Environmental PoUdes

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Fig. 2. Outcomes in a standard social dilemma payoff matrix.

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sanctions promote cooperative compliance. Market-based strategies target a different quadrant in the matrix, reversing the payoffs for the individual cooperative and defecting choices (Fig. 4). Rather than punishing defection, the object is rewarding cooperation. Now the cooperative "good for you" payoff becomes the most beneficial individual choice or the "great for you" payoff. Rather than fear, it is the desire for higher rewards that motivates cooperation in this case. Both strategies also eliminate the sucker's payoff so that cooperation is no longer riskier than defection. Voluntarist strate­gies do not alter the payoff structure of the standard social dilemma. Rather, they elicit behavioral change in spite of the temptation to free ride.

Traditional environmental policy approaches, i.e., command-and-eon­trol, are generally ill-suited for solving contemporary environmental

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Fig. 3. Outcomes in a transformed social dilemma payoff matrix as a consequence of com­maud-and-control solutions.

Ycurf-..riderteDdcacy

461 Underpinnings of Environlllental PoUdes

for and obligation to others. Recently, sociologists have discussed how vol­untarism may succeed in a highly individualistic society (Etzioni, 1993; Bellah et al., 1991). As a strategy, however, it is also subject to the ano­nymity problem. Normative influence requires a great deal of visibility and an aversion to being seen as a nonconformist. Voluntarism relies not only on these social values of cooperation, but also requires substantive knowl­edge of environmental problems. Under both command-and-control and market-based strategies, one may comply for economic reasons without re­gard to these issues, but if one is to voluntarily choose the collective good over immediate self-interest, information about the issues and relevance of one's actions is much more important.

It is also possible that voluntarism may be undermined by concurrence of either command-and-control and market-based policies. To the degree that one anticipates uniform requirements or financial incentives to coop­erate, one is less likely to see. the need for voluntarily incurring costs. In fact, some voluntary programs are merely proxies for command-and-con­trol, For example, President Clinton recently proposed that Northwest timber companies voluntarily propose their own wildlife management pro­grams in exchange for assurance that future regulatory changes will not apply to these managed areas (Seattle Times, 1994). When compliance, voluntary or involuntary, is typically motivated by fear (of potential sanc­tions), then it is unlikely to be alternatively motivated by the norm of social responsibility.

Although voluntarism may be undermined by the introduction of the other strategies, it may make sense to begin with voluntarist strategies, em­ploying the others only if volunteerism fails. Voluntarist strategies rely upon education about collective issues and the elicitation of good citizenship. It seems ever appropriate to encourage public discourse regarding social di­lemmas in a democracy. Furthermore, establishing goals regarding environmental outcomes is a social and political process that ought to be conducted as much by the public as by scientists and policymakers. Both command-and-control and market-based policies operate only after these goals are established. Thus, voluntarism may be encouraged by the process of education and public discourse, and whether or not this process yields the desired behavioral changes voluntarily, the goals will have been estab­lished for the introduction of the alternative policies.

Environmental policy is at a crossroads. Traditional command-and­control policies are considered less effective today despite continued reliance upon them. Recently, alternatives to command-and-control have entered the policy arena. To date, little research has been done that com­pares the relative effectiveness of each type of policy, variants within each type, or their effectiveness at changing different types of behavior. These

462 Karp and Gaulding

should be subjects of future research. This article attempts to integrate the policy alternatives into a theoretical framework enabling some comparisons to be made. Much research has been conducted exploring the dynamics of cooperation in social dilemmas, though little has been done as yet to better generalize these experimental findings to real world situations. Neverthe­less, the social dilemmas paradigm provides a useful heuristic for distinguishing the three policy approaches and evaluating their potential for solving contemporary environmental dilemmas.

ACKNOWLEDGMENTS

We would like to thank Karen Cook, the two anonymous reviewers, and the students of the sociology department dissertation seminar for their helpful comments on previous drafts of this manuscript.

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