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Voluntary Environmental Regulation in Developing Countries: Mexico's Clean Industry Program

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  • Blackman, Allen

    ()
    (Resources for the Future)

  • Lahiri, Bidisha
  • Pizer, William A.

    (Resources for the Future)

  • Planter, Marisol Rivera
  • Piña, Carlos Muñoz

Abstract

Because conventional command-and-control environmental regulation often performs poorly in developing countries, policymakers are increasingly experimenting with alternatives, including voluntary regulatory programs. Research in industrialized countries suggests that such programs are sometimes ineffective because they mainly attract relatively clean participants free-riding on unrelated pollution control investments. We use plant-level data on more than 100,000 facilities to analyze the Clean Industry Program, Mexico’s flagship voluntary regulatory initiative. We seek to identify the drivers of participation and to determine whether the program improves participants’ environmental performance. Using data from the program’s first decade, we find that plants recently fined by environmental regulators were more likely to participate, but that after graduating from the program, participants were not fined at a substantially lower rate than nonparticipants. These results suggest that although the Clean Industry Program attracted dirty plants under pressure from regulators, it did not have a large, lasting impact on their environmental performance.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-07-36-rev.

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Date of creation: 25 Aug 2010
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Handle: RePEc:rff:dpaper:dp-07-36-rev

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Keywords: voluntary environmental regulation; duration analysis; propensity score matching; Mexico;

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  1. Gamper-Rabindran, Shanti, 2006. "Did the EPA's voluntary industrial toxics program reduce emissions? A GIS analysis of distributional impacts and by-media analysis of substitution," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 391-410, July.
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Cited by:
  1. 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.
  2. Bryden, Anna & Petticrew, Mark & Mays, Nicholas & Eastmure, Elizabeth & Knai, Cecile, 2013. "Voluntary agreements between government and business—A scoping review of the literature with specific reference to the Public Health Responsibility Deal," Health Policy, Elsevier, vol. 110(2), pages 186-197.
  3. Blackman, Allen & Guerrero, Santiago, 2012. "What drives voluntary eco-certification in Mexico?," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 256-268.
  4. Blackman, Allen & Uribe, Eduardo & van Hoof, Bart & Lyon, Thomas P., 2012. "Voluntary Environmental Agreements in Developing Countries: The Colombian Experience," Discussion Papers dp-12-06, Resources For the Future.
  5. Blackman, Allen, 2009. "Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary," Discussion Papers dp-09-14-efd, Resources For the Future.
  6. Martina Vidovic & Neha Khanna, 2012. "Is Voluntary Pollution Abatement in the Absence of a Carrot or Stick Effective? Evidence from Facility Participation in the EPA’s 33/50 Program," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 52(3), pages 369-393, July.
  7. Tamini, Lota D., 2011. "A nonparametric analysis of the impact of agri-environmental advisory activities on best management practice adoption: A case study of Québec," Ecological Economics, Elsevier, vol. 70(7), pages 1363-1374, May.
  8. Madrigal, Roger & Alpizar, Francisco & Schluter, Achim, 2011. "Individual Perceptions and the Performance of Community-Based Drinking Water Organizations," Discussion Papers dp-11-07-efd, Resources For the Future.
  9. Allen Blackman, 2010. "Alternative Pollution Control Policies in Developing Countries," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 234-253, Summer.

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