Incentives for Importer Choices (CEBRA Project 1304C)

Abstract

This report considers how the department can use microeconomic theory, including the theory of incentive and information economics, to design intervention protocols that encourage participants to reduce the likelihood of biosecurity risk material entering Australia.<br/> Changes to the rules of the biosecurity “game” may induce changes in behaviour from import-supply chain participants. Some rules might lead participants to take actions that potentially undermine the Australian Government’s biosecurity objective; other rules may lead participants to take actions that are beneficial to the national biosecurity objective. Economics provides a framework to test which policy settings (including rules, incentive structures, monitoring practices etc.) align the actions of import-supply chain participants with the objectives of government.<br/> The project employed three strategies to inform the design of compliance-based inspection protocols to improve the alignment between government biosecurity objectives and the commercial objectives of import-supply chain participants, namely:<br/> i. use of administrative data;<br/> ii. interviews with relevant biosecurity stakeholders; and<br/> iii. insights from economic theory.<br/>