Digital consultation of firms and perception of government's regulatory legitimacy: Piloting an experiment in regulation design in Thailand

While evidence indicates that the notice and comment (N&C) process improves regulatory compliance by increasing trust in government, there is reason to doubt this mechanism’s viability in the digital realm. The lack of direct human interactions online can lead participating firms to feel unheard and unengaged. As a result, online N&C efforts can actually undermine firms’ views of the government’s regulatory authority and hamper efforts towards compliance. To address this potential for backlash within digital N&C, we pilot a Regulatory Room, an online space where firms’ representatives meet with legal experts to improve the quality of suggested revisions to draft regulations. Our randomized controlled trial (RCT) in Thailand tests the value of participation in the Regulatory Room relative to standard digital N&C for feedback on a regulation governing small hotels. Within the pilot, we find strong and consistent evidence that the Regulatory Room improves commenting firms’ own: a) views of the quality of the consultation process, b) perceived understanding of the draft regulation, and c) beliefs that their own submitted comments will be read and understood by government officials. With weaker statistical significance, we also find evidence of improvement in firms’ views of government’s regulatory legitimacy. Behaviorally, we find evidence that Regulatory Room participation improves the quality of firms’ submitted comments and the probability that a firm will submit a comment on the draft regulation to the digital platform.