Moral Suasion - Moral Suasion in Different Political Regimes

Moral Suasion in Different Political Regimes

Although moral suasion can theoretically be used in any political regime, it has a higher chance of being effective in cases where the political authority is centralised and effective.

Centralisation of authority contributes to the effectiveness of moral suasion as a policy tool since it makes the government's positions clearer and more consistent. Attempts by governments to influence the behaviour of companies and citizens can therefore be understood more clearly.

Effectiveness of authority refers to the ease in which the intentions of the political executive can be transformed into legislative or regulatory action. This is important because the governments and agencies can use implied threats of price controls, additional regulation or taxation to induce certain behaviours from companies. Such threats will only have credibility if companies think that these threats will be carried out if they do not comply.

As fewness of economic agents to be persuaded is a necessary condition for moral suasion to be effective, this policy instrument is more adapted to countries with higher concentration of suppliers, both in terms of number and of geography .

Studies suggest that moral suasion is usually not effective in environmental matters in advanced economies. It can, however, still be used for developing countries since there are still easy environmental gains that could be made without heavy-handed regulation.