Exploring the Complementary Role of Voluntary Environmental Programs in Regulatory Governance: Evidence From South Korea

Abstract

This study investigates the derivative effects of voluntary environmental programs (VEPs) on regulatory activities, specifically focusing on South Korea's Self-Policing Program for Environmentally Responsible Facilities (SPP). While VEPs are typically evaluated based on their environmental performance of participating firms, this research shifts attention to their broader influence on public regulatory practices and oversight of non-participants. In particular, it explores how VEPs may shape enforcement strategies under conditions of limited governmental resources. Using panel data analysis, the study finds that participation in the SPP is positively associated with increased regulatory inspections and, indirectly, with a higher likelihood of detecting violations. These results suggest that VEPs can serve as informational tools for regulators, helping them to prioritize oversight and allocate enforcement resources more strategically. The findings highlight how VEPs can enhance the efficiency of regulatory governance not only through direct compliance gains but also by altering the behaviors of regulators and the treatment of non-participating firms—an area largely overlooked in existing public management literature. This contributes to a comprehensive understanding of the promising role of VEPs in bolstering regulatory governance, particularly for governments grappling with aligning their regulatory capacity with growing public demands for stricter environmental regulations.