Abstract

How do regulatory bodies ensure that including the beneficiaries of regulation in regulatory processes improves governance? In many regulatory arrangements, beneficiaries' "fire alarm" monitoring and reporting of targets' violations via complaint mechanisms activate regulatory bodies' enforcement role. This article theorizes how beneficiaries may misuse complaint mechanisms, undermine regulators' performance, and prompt regulators to adopt strategies within and beyond the complaint process to regulate beneficiaries' behavior. It argues regulators' assessment of the issues driving misuse and their enforcement approach (cooperative or deterrent) affect their strategies for influencing beneficiaries. Case studies of two Canadian human rights institutions, which have different enforcement approaches but experienced similarly extreme levels of beneficiary misuse during the COVID-19 pandemic, evaluate these theoretical claims. Overall, the study illustrates potential enforcement challenges arising from using beneficiaries as intermediaries for monitoring and reporting violations and how regulating beneficiary participation may be required to improve decentralized regulatory governance.