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Should you turn yourself in? The consequences of environmental self-policing

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  • Sarah L. Stafford

    (The College of William & Mary, Williamsburg, VA)

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    Abstract

    Facilities that self-police under the Environmental Protection Agency's Audit Policy are eligible for reduced penalties on disclosed violations. This paper investigates whether self-policing has additional consequences; in particular, whether self-policing reduces future enforcement activity. Using data on U.S. hazardous waste enforcement and disclosures, I find that facilities that self-police are rewarded with a lower probability of inspection in the future, although facilities with good compliance records receive a smaller benefit than facilities with poor records. Additionally, facilities that are inspected frequently are more likely to disclose than facilities that face a low probability of inspection. The results suggest that facilities may be able to strategically disclose in order to decrease future enforcement. © 2007 by the Association for Public Policy Analysis and Management

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    File URL: http://hdl.handle.net/10.1002/pam.20249
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

    Volume (Year): 26 (2007)
    Issue (Month): 2 ()
    Pages: 305-326

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    Handle: RePEc:wly:jpamgt:v:26:y:2007:i:2:p:305-326

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    Web page: http://www3.interscience.wiley.com/journal/34787/home

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    1. Heyes, Anthony G., 1996. "Cutting environmental penalties to protect the environment," Journal of Public Economics, Elsevier, vol. 60(2), pages 251-265, May.
    2. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
    3. Livernois, John & McKenna, C. J., 1999. "Truth or consequences: Enforcing pollution standards with self-reporting," Journal of Public Economics, Elsevier, vol. 71(3), pages 415-440, March.
    4. Harford, Jon D. & Harrington, Winston, 1991. "A reconsideration of enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 45(3), pages 391-395, August.
    5. Friesen, Lana, 2001. "Targeting Enforcement to Improve Compliance with Environmental Regulations," 2001 Conference (45th), January 23-25, 2001, Adelaide 125634, Australian Agricultural and Resource Economics Society.
    6. Morgenstern, Richard, 1996. "Does the Provision of Free Technical Information Really Influence Firm Behavior?," Discussion Papers dp-96-16, Resources For the Future.
    7. Innes, Robert, 2000. "Self-Reporting in Optimal Law Enforcement When Violators Have Heterogeneous Probabilities of Apprehension," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 287-300, January.
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    Cited by:
    1. Sarah Stafford, 2013. "How predictable are environmental compliance inspections?," Journal of Regulatory Economics, Springer, vol. 44(3), pages 361-388, December.
    2. Julien Etienne, 2010. "Self-reporting untoward events to external controllers: accounting for reporting failure by a top tier chemical plant," LSE Research Online Documents on Economics 36546, London School of Economics and Political Science, LSE Library.
    3. Mary F. Evans & Lirong Liu & Sarah L. Stafford, 2008. "Do Environmental Audits Improve Long-term Compliance? Evidence from Manufacturing Facilities in Michigan," Working Papers 78, Department of Economics, College of William and Mary, revised 25 Sep 2011.
    4. Blackman, Allen, 2011. "Does Eco-Certification Boost Regulatory Compliance in Developing Countries? ISO 14001 in Mexico," Discussion Papers dp-11-39, Resources For the Future.
    5. Valentina Mele & Donald Schepers, 2013. "E Pluribus Unum? Legitimacy Issues and Multi-stakeholder Codes of Conduct," Journal of Business Ethics, Springer, vol. 118(3), pages 561-576, December.

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