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Enforcement and over-compliance

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  • Shimshack, Jay P.
  • Ward, Michael B.

Abstract

Economists generally view environmental enforcement as a tool to secure compliance with regulations. This paper demonstrates that credible enforcement significantly increases statutory overcompliance with regulations as well. We find that many plants with discharges typically below legally permitted levels reduce discharges further when regulators issue fines, even on other plants. Also, likely non-compliant plants often respond to sanctions by reducing discharges well beyond reductions required by law. Thus, increased enforcement generates substantial discharge reductions above and beyond those expected from simply deterring violations.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 55 (2008)
Issue (Month): 1 (January)
Pages: 90-105

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Handle: RePEc:eee:jeeman:v:55:y:2008:i:1:p:90-105

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Web page: http://www.elsevier.com/locate/inca/622870

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References

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  13. Stafford, Sarah L., 2002. "The Effect of Punishment on Firm Compliance with Hazardous Waste Regulations," Journal of Environmental Economics and Management, Elsevier, vol. 44(2), pages 290-308, September.
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  17. Shimshack, Jay P. & Ward, Michael B., 2005. "Regulator reputation, enforcement, and environmental compliance," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 519-540, November.
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Citations

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Cited by:
  1. Bandyopadhyay Sushenjit & Horowitz John, 2006. "Do Plants Overcomply with Water Pollution Regulations? The Role of Discharge Variability," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-32, January.
  2. Hugh McDonald & Suzi Kerr, 2011. "Trading Efficiency in Water Quality Trading Markets: An Assessment of Trade-Offs," Working Papers 11_15, Motu Economic and Public Policy Research.
  3. Wayne B. Gray & Jay P. Shimshack, 2011. "The Effectiveness of Environmental Monitoring and Enforcement: A Review of the Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 3-24, Winter.
  4. Erin Marie Reid & Michael W. Toffel, 2008. "Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies," Harvard Business School Working Papers 09-019, Harvard Business School, revised Jun 2009.
  5. Guglielmo Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2010. "Pollution Abatement And Control Expenditure In Romania: A Multilevel Analysis," William Davidson Institute Working Papers Series wp994, William Davidson Institute at the University of Michigan.
  6. Arguedas, Carmen & Rousseau, Sandra, 2012. "Learning about compliance under asymmetric information," Resource and Energy Economics, Elsevier, vol. 34(1), pages 55-73.
  7. Robert Sova & Christophe Rault & Guglielmo Caporale & Anamaria Sova, 2014. "Improving Environmental Performance: A Challenge for Romania," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 57(3), pages 431-452, March.
  8. Hanna Rema Nadeem & Oliva Paulina, 2010. "The Impact of Inspections on Plant-Level Air Emissions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-33, March.
  9. Bouwe R. Dijkstra & Dirk T.G. Rübbelke, 2007. "Group Rewards and Individual Sanctions in Environmental Policy," Working Papers 2007.44, Fondazione Eni Enrico Mattei.
  10. Wu JunJie & Wirkkala Teresa M., 2009. "Firms' Motivations for Environmental Overcompliance," Review of Law & Economics, De Gruyter, vol. 5(1), pages 399-433, June.
  11. Evans, Mary F. & Gilpatric, Scott M. & Liu, Lirong, 2009. "Regulation with direct benefits of information disclosure and imperfect monitoring," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 284-292, May.
  12. Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
  13. Lin, Liguo, 2013. "Enforcement of pollution levies in China," Journal of Public Economics, Elsevier, vol. 98(C), pages 32-43.
  14. Fatih Karanfil, 2011. "Environmental regulation in the presence of unrecorded economy," Economie Internationale, CEPII research center, issue 126-127, pages 91-108.
  15. Ujjayant Chakravorty & Céline Nauges & Henry Thille, 2012. "Gasoline Content Regulation and Compliance among US Refineries," CESifo Working Paper Series 3978, CESifo Group Munich.
  16. Mieno, Taro & Brozovic, Nicholas, 2012. "Unraveling deterrence effects of regulatory activities under Clean Water Act," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124612, Agricultural and Applied Economics Association.
  17. Shital Sharma, 2013. "Environmental Regulation, Abatement, and Productivity: A Frontier Analysis," Working Papers 13-51, Center for Economic Studies, U.S. Census Bureau.

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