The Challenge of Institutional Integrity in Responsive Regulation: Field Inspections by the Australian Taxation Office

Abstract

Based on responsive regulation, the Australian Taxation Office (ATO) ComplianceModel was developed as a way of dealing with the complexities of the Australian tax system. This article demonstrates some of the challenges that come with introducing responsive regulation into a bureaucracy such as the ATO. Selznick's ideas of institutional integrity provide a conceptual framework that allows the regulatory agency engaged in responsive regulation to emphasize voluntary compliance and the building of positive relationships with the regulatee, while simultaneously ensuring that non-compliance is both detected and dealt with. Using evidence from a qualitative study of ATO "walk-ins" with used car dealers, the article demonstrates the unintended consequences that can occur without institutional integrity both at the level of design and at the level of everyday ATO field-officer practices.

Responsive regulation at the Dutch Food and Consumer Product Safety Authority: An empirical assessment of assumptions underlying the theory

“…2007a; Baldwin & Black 2008, p. 64). For example, Waller (2007) studied unannounced “walk‐ins”, where field officers of the ATO visited used car dealers. As mentioned before, this organization has tried to implement responsive regulation.…”

“…The opposite – inspectors trying to behave constructively but being perceived as unconstructive by regulatees – seems to occur much more often. For example, in her study of “walk‐ins” with used car dealers, Waller (2007, pp. 78–80) ascertained that although field officers consistently presented themselves as friendly and non‐threatening, in more than half of the 29 observed interactions the dealers exhibited defiant behavior, or seemed very nervous about the visit.…”

Culture Change in Three Taxation Administrations: From Command‐and‐Control to Responsive Regulation

“…For example, some looked for scripts that told them what to do and say to the taxpayer. While such manuals might make staff feel more confident about making the change, Waller (2007, this issue) highlights that rigid adherence to a checklist of questions by ATO operatives not only can obstruct a responsive style of regulation, but lessens the credibility of operatives with taxpayers. Taxpayers expect operatives to be knowledgeable, perceptive and smart, not automated.…”

Narrative and Tax Compliance

“…2 Scholars(Freedman, 2011;Osofsky, 2012) have also critiqued responsive regulation attempts in the large business context. 3 For example, one study(Waller, 2007) of "walk-ins" by Australian revenue agents at car dealerships reports that despite the stated intention of building service and compliance on the part of the agency, the car dealers viewed the visits with suspicion.…”