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Incomplete enforcement of pollution regulation : bargaining power of Chinese factories

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Author Info
Hua Wang
Mamingi, Nlandu
Laplante, Benoit
Dasgupta, Susmita

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Abstract

Only a small number of studies have empirically examined the determinants of the monitoring and enforcement performed by environmental regulators, and most of these have focused on industrial countries. In contrast, the authors empirically examine the determinants of enforcement in China. More precisely, they analyze the determinants of firms'relative bargaining power with local environmental authorities with respect to the enforcement of pollution charges. The authors show that private sector firms appear to have less bargaining power than state-owned enterprises. Contrary to earlier findings, they also show that firms facing adverse financial situations have more bargaining power than other firms and are more likely to pay smaller pollution charges than they should be paying. Finally, the authors show that the greater the social impact of a firm's emissions (as measured by complaints), the less bargaining power it has with local environmental authorities.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2756.

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Date of creation: 31 Jan 2002
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Handle: RePEc:wbk:wbrwps:2756

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

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ricketts, Martin & Peacock, Alan, 1986. "Bargaining and the regulatory system," International Review of Law and Economics, Elsevier, vol. 6(1), pages 3-16, June. [Downloadable!] (restricted)
  2. Garvie, Devon & Keeler, Andrew, 1994. "Incomplete enforcement with endogenous regulatory choice," Journal of Public Economics, Elsevier, vol. 55(1), pages 141-162, September. [Downloadable!] (restricted)
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  3. Dasgupta, Susmita & Huq, Mainul & Wheeler, David, 1997. "Bending the rules : discretionary pollution control in China," Policy Research Working Paper Series 1761, The World Bank. [Downloadable!]
  4. Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756, December.
  5. Hua Wang & Ming Chen, 1999. "How the Chinese system of charges and subsidies affects pollution control efforts by China's top industrial polluters," Policy Research Working Paper Series 2198, The World Bank. [Downloadable!]
  6. Hua Wang & Wheeler, David, 2000. "Endogenous enforcement and effectiveness of China's pollution levy system," Policy Research Working Paper Series 2336, The World Bank. [Downloadable!]
  7. Dasgupta, Susmita & Laplante, Benoit & Mamingi, Nlandu & Wang, Hua, 2001. "Inspections, pollution prices, and environmental performance: evidence from China," Ecological Economics, Elsevier, vol. 36(3), pages 487-498, March. [Downloadable!] (restricted)
  8. Pargal, Sheoli & Wheeler, David, 1996. "Informal Regulation of Industrial Pollution in Developing Countries: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1314-27, December. [Downloadable!] (restricted)
  9. Mary E. Deily & Wayne B. Gray, 1989. "Enforcement of pollution regulations in a declining industry," Working Paper 8912, Federal Reserve Bank of Cleveland. [Downloadable!]
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  10. 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. [Downloadable!] (restricted)
  11. Porter, Richard C., 1988. "Environmental negotiation: Its potential and its economic efficiency," Journal of Environmental Economics and Management, Elsevier, vol. 15(2), pages 129-142, June. [Downloadable!] (restricted)
  12. Richard A. Posner, 1974. "Theories of Economic Regulation," NBER Working Papers 0041, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Hua Wang & Wheeler, David, 1996. "Pricing industrial pollution in China : an econometric analysis of the levy system," Policy Research Working Paper Series 1644, The World Bank. [Downloadable!]
  14. Amacher, Gregory S. & Malik, Arun S., 1996. "Bargaining in Environmental Regulation and the Ideal Regulator," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 233-253, March. [Downloadable!] (restricted)
  15. Amacher, Gregory S. & Malik, Arun S., 1998. "Instrument Choice When Regulators and Firms Bargain," Journal of Environmental Economics and Management, Elsevier, vol. 35(3), pages 225-241, May. [Downloadable!] (restricted)
  16. Dion, Catherine & Lanoie, Paul & Laplante, Benoit, 1998. "Monitoring of Pollution Regulation: Do Local Conditions Matter?," Journal of Regulatory Economics, Springer, vol. 13(1), pages 5-18, January. [Downloadable!] (restricted)
  17. Ahn, Seung C. & Schmidt, Peter, 1995. "Efficient estimation of models for dynamic panel data," Journal of Econometrics, Elsevier, vol. 68(1), pages 5-27, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. James Roumasset & Kimberly Burnett & Hua Wang, 2007. "Is China’s Growth Sustainable?," Working Papers 200723, University of Hawaii at Manoa, Department of Economics. [Downloadable!]
  2. Dean, Judith M. & Lovely, Mary E. & Wang, Hua, 2004. "Foreign Direct Investment and Pollution Havens: Evaluating the Evidence from China," Working Papers 15854, United States International Trade Commission, Office of Economics. [Downloadable!]
  3. Dean, Judith M. & Lovely, Mary E. & Wang, Hua, 2005. "Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China," Policy Research Working Paper Series 3505, The World Bank. [Downloadable!]
  4. Kaiser, Kai & Schulze, Gunther G., 2003. "International Competition and Environmental Expenditures: Empirical Evidence from Indonesian Manufacturing Plants," Discussion Paper Series 26255, Hamburg Institute of International Economics. [Downloadable!]
  5. Wang, Hua & Jin, Yanhong, 2002. "Ownership And Industrial Pollution Control: Evidence From China," 2002 Annual meeting, July 28-31, Long Beach, CA 19671, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  6. Hua Wang & Yanhong Jin, 2002. "Industrial ownership and environmental performance : evidence from China," Policy Research Working Paper Series 2936, The World Bank. [Downloadable!]
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