A Framework on Mandating Versus Incentivizing Corporate Social Responsibility

Abstract

There are two primary but different methods of controlling behavior, whether it is the behavior of individuals or corporations: to incentivize it or to regulate it. Governments are in a unique position to employ either or both options because of their ability to pass regulatory schemes and to extend tax incentives. This article analyzes the two methods of shaping corporate behavior, examining the regulation issue through the case of the conflict minerals provision of the Dodd Frank Act and examining the taxation issue through several examples of corporate tax incentives. This article contributes to this field of literature by setting out a framework for analyzing the efficacy of regulations and incentives directed at shaping corporate behavior and corporate social responsibility.