Using a theoretical framework to analyze regulatory agency decision-making for OSHA in its current federalist structure, this study shows, that individual regulators' preferences are important in determining policy outcomes. In order to maximize net positive feedback, regulators substitute between the tools of enforcement action---frequency of inspection and time spent (per worker) per inspection. The effect of enforcement actions on firm compliance is then evaluated. Empirically, Heckman's selection model is estimated using plant-level data for private manufacturing sector from 1993 through 2001, to compare the decision-making process between the federal OSHA states and state plan states. Results show that: no single theory can predict policy outcomes; Blinder & Oaxaca decomposition indicate that along with the contextual environment, preferences of the regulator determine the enforcement policies; there is some evidence that the regulator strategically substitutes between the enforcement tools in order to maximize net positive feedback from the regulated community. Further, results of the statistical compliance model indicate that most state-plan states are as effective as federal OSHA states in inducing firm compliance.
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