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Inspections and emissions in India : puzzling survey evidence about industrial pollution

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  • Pargal, Sheoli
  • Mani, Muthukumara
  • Huq, Mainul
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    Abstract

    Industrial plants face pressure to abate water pollution from many sources, national and local, through formal government regulation and through more informal pressure from consumer groups and concern for the firm's reputation. Formal regulation tends to reflect the bargaining power of local communities and is not as uniform or blind as the law would imply. Regulators are not immune to the pulls and pushes of powerful community interests. Studies of enforcement in the U.S. steel industry, for example, find that it is weaker at plants that are major employers in the local labor market. Using survey data from India, the authors examine whether themonitoring and enforcement efforts of provincial pollution control authorities are affected by local community characteristics (which serve as proxies for political power). They also test for evidence that informal pressure on plants results in negotiated reductions in emissions. They find that high levels of pollution in India elicit a formal regulatory response: inspections. But inspections are ineffective in bringing about changes in behavior, probably because of bureaucratic or other problems in follow-through. Moreover, poorly-paid inspectors with low morale may be susceptible to"rent-seeking."They find little evidence to support the hypothesis that better-educated and higher-income communities are better able to pressure plants to reduce emissions than are poorer communities, although there are significantly more inspections in more developed districts. In India, whatever community pressure exists is probably channeled through formal regulatory mechanisms. Larger plants in India, as in the rest of the world, tend to be"cleaner"than smaller plants. Indian policymakers and regulators may want to explicitly recognize the tradeoff in environmental quality of the existing regulatory bias toward the small- and medium-scale sector.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1810.

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    Date of creation: 31 Aug 1997
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    Handle: RePEc:wbk:wbrwps:1810

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    Keywords: Sanitation and Sewerage; Environmental Economics&Policies; Water and Industry; Water Conservation; Public Health Promotion; Water Conservation; Environmental Economics&Policies; Water and Industry; Sanitation and Sewerage; TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2; 500/AL;

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    References

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    1. Brooks, Nancy & Sethi, Rajiv, 1997. "The Distribution of Pollution: Community Characteristics and Exposure to Air Toxics," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 233-250, February.
    2. Eskeland, Gunnar S. & Harrison, Ann E., 1997. "Moving to greener pastures : multinationals and the pollution-haven hypothesis," Policy Research Working Paper Series 1744, The World Bank.
    3. Gray, Wayne B. & Deily, Mary E., 1996. "Compliance and Enforcement: Air Pollution Regulation in the U.S. Steel Industry," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 96-111, July.
    4. Dasgupta, Susmita & Wheeler, David, 1997. "Citizen complaints as environmental indicators : evidence from China," Policy Research Working Paper Series 1704, The World Bank.
    5. Dion, Catherine & Lanoie, Paul & Laplante, Benoit, 1997. "Monitoring environmental standards : do local conditions matter?," Policy Research Working Paper Series 1701, The World Bank.
    6. Susmita Dasgupta & Mainul Huq & David Wheeler & Chonghua Zhang, 2001. "Water pollution abatement by Chinese industry: cost estimates and policy implications," Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 547-557.
    7. James T. Hamilton, 1993. "Politics and Social Costs: Estimating the Impact of Collective Action on Hazardous Waste Facilities," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 101-125, Spring.
    8. Seema Arora & Timothy N. Cason, 1996. "Why Do Firms Volunteer to Exceed Environmental Regulations? Understanding Participation in EPA's 33/50 Program," Land Economics, University of Wisconsin Press, vol. 72(4), pages 413-432.
    9. Magat, Wesley A & Viscusi, W Kip, 1990. "Effectiveness of the EPA's Regulatory Enforcement: The Case of Industrial Effluent Standards," Journal of Law and Economics, University of Chicago Press, vol. 33(2), pages 331-60, October.
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    Cited by:
    1. Badri Narayanan G., 2010. "Eff ects of Trade liberalisation, Environmental and Labour Regulations on Employment in India's Organised Textile Sector," Working Papers id:2720, eSocialSciences.

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