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Informational Regulation of Environmental Risks

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  • Paul R. Kleindorfer
  • Eric W. Orts

Abstract

This paper examines the law and economics of informational regulation (IR) of environmental risks. Informational regulation here means regulation which provides to affected stakeholders information on the operations of regulated entities, usually with the expectation that such stakeholders will then exert pressure on these entities to comply with regulations in a manner which serves the interests of stakeholders. As such, IR reinforces and augments direct regulatory monitoring and enforcement through third‐party monitoring and incentives. The paper provides two contrasting frameworks, from law and economics, to analyze the costs and benefits likely to arise from IR and concludes with a discussion of the appropriate scope of IR as a substitute for and complement of traditional environmental regulation and law.

Suggested Citation

  • Paul R. Kleindorfer & Eric W. Orts, 1998. "Informational Regulation of Environmental Risks," Risk Analysis, John Wiley & Sons, vol. 18(2), pages 155-170, April.
    • Handle: RePEc:wly:riskan:v:18:y:1998:i:2:p:155-170
    DOI: 10.1111/j.1539-6924.1998.tb00927.x
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sinclair-Desgagne, Bernard & Gozlan, Estelle, 2003. "A theory of environmental risk disclosure," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 377-393, March.
    2. David F. Drake & Stefan Spinler, 2013. "OM Forum —Sustainable Operations Management: An Enduring Stream or a Passing Fancy?," Manufacturing & Service Operations Management, INFORMS, vol. 15(4), pages 689-700, October.
    3. David Weil & Archon Fung & Mary Graham & Elena Fagotto, 2006. "The effectiveness of regulatory disclosure policies," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(1), pages 155-181.
    4. Charles J. Corbett & Robert D. Klassen, 2006. "Extending the Horizons: Environmental Excellence as Key to Improving Operations," Manufacturing & Service Operations Management, INFORMS, vol. 8(1), pages 5-22, March.
    5. Shanti Gamper-Rabindran & Stephen Finger, 2013. "Does industry self-regulation reduce pollution? Responsible Care in the chemical industry," Journal of Regulatory Economics, Springer, vol. 43(1), pages 1-30, January.
    6. Andrew B. Whitford, 2008. "A Test of the Political Control of Bureaucracies Under Asymmetric Information," Rationality and Society, , vol. 20(4), pages 445-470, November.
    7. Michael R. Elliott & Paul R. Keindorfer & Robert A. Lowe, 2003. "The Role of Hazardousness and Regulatory Practice in the Accidental Release of Chemicals at U.S. Industrial Facilities," Risk Analysis, John Wiley & Sons, vol. 23(5), pages 883-896, October.
    8. Shi, Daqian & Bu, Caiqi & Xue, Huiyuan, 2021. "Deterrence effects of disclosure: The impact of environmental information disclosure on emission reduction of firms," Energy Economics, Elsevier, vol. 104(C).
    9. Vicki M. Bier & Shi‐Woei Lin, 2013. "Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?," Risk Analysis, John Wiley & Sons, vol. 33(2), pages 281-291, February.
    10. Bernard Sinclair-Desgagné & Carel Vachon, 1999. "Dealing with Major Technological Risks," CIRANO Working Papers 99s-29, CIRANO.

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