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Do words kill faster than bullets? Reputational sanctions as an instrument...

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Title Do words kill faster than bullets? Reputational sanctions as an instrument to promote regulatory compliance
Period 01 / 2007 - 12 / 2009
Status Completed
Research number OND1315122
Data Supplier Nederlandse Organisatie voor Wetenschappelijk Onderzoek - NWO

Abstract

Companies that offend the law should not be surprised nowadays to see their names published or even to be publicly stigmatized. The idea is that 'naming and shaming' will harm the market position of the offender and will prevent other companies from breaking the law. The increase of reputational sanctioning gives rise to many questions about their justness and effectiveness. These questions have practical, as well as academic and political relevance. However, scientific knowledge on reputational sanctioning as a policy instrument has not yet been provided. The aim of this proposal is to develop a theory on reputational sanctioning, providing insight into the nature and effectiveness of reputational sanctions in comparison to more traditional punitive instruments. In other words, to answer the question: do words kill faster than bullets? The first main component of this proposal is an empirical study of the effects of reputational sanctions. The impact of reputational sanctions will be established as well as their working mechanism and the conditions to their effectiveness. This will be done on the basis of an in depth study among companies and consumers, making use of a survey and interviews. The field of financial and securities services seems to offer interesting research opportunities. Second, legal design aspects of reputational sanctions will be adressed. Regulators struggle with issues such as legal protection, proportionality of sanctions, and financial claims. The study will result in a socio-legal theory on the effectivity of reputational sanctions and a legal arrangement in which they can be applied.

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Project leader Dr. J.G. van Erp

Classification

A50000 Economics
D41500 Interdisciplinary branches of law

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