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Voluntary environmental regulation in developing countries: Mexico's Clean Industry Program

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Listed:
  • Blackman, Allen
  • Lahiri, Bidisha
  • Pizer, William
  • Rivera Planter, Marisol
  • Muñoz Piña, Carlos

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.

Suggested Citation

  • Blackman, Allen & Lahiri, Bidisha & Pizer, William & Rivera Planter, Marisol & Muñoz Piña, Carlos, 2010. "Voluntary environmental regulation in developing countries: Mexico's Clean Industry Program," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 182-192, November.
  • Handle: RePEc:eee:jeeman:v:60:y:2010:i:3:p:182-192
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    Citations

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    Cited by:

    1. 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.
    2. repec:spr:manint:v:52:y:2012:i:1:d:10.1007_s11575-011-0098-8 is not listed on IDEAS
    3. Blackman, Allen, 2009. "Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary," Discussion Papers dp-09-10, Resources For the Future.
    4. 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.
    5. Blackman, Allen & Naranjo, Maria A., 2012. "Does eco-certification have environmental benefits? Organic coffee in Costa Rica," Ecological Economics, Elsevier, vol. 83(C), pages 58-66.
    6. repec:gam:jsusta:v:10:y:2018:i:3:p:641-:d:133963 is not listed on IDEAS
    7. Blackman, Allen & Guerrero, Santiago, 2012. "What drives voluntary eco-certification in Mexico?," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 256-268.
    8. 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.
    9. 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.
    10. David Maradan & Karim Zein, 2011. "Regulating Industry Emissions: Assessing the Moroccan Cement Experiences," Working Papers 598, Economic Research Forum, revised 07 Jan 2011.
    11. Allen Blackman, 2012. "Does eco-certification boost regulatory compliance in developing countries? ISO 14001 in Mexico," Journal of Regulatory Economics, Springer, vol. 42(3), pages 242-263, December.
    12. Kathleen Segerson, 2013. "Voluntary Approaches to Environmental Protection and Resource Management," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 161-180, June.
    13. Allen Blackman & Eduardo Uribe & Bart Hoof & Thomas Lyon, 2013. "Voluntary environmental agreements in developing countries: the Colombian experience," Policy Sciences, Springer;Society of Policy Sciences, vol. 46(4), pages 335-385, December.
    14. World Bank, 2013. "Strategic Environmental Assessment for Industry Sector Himachal Pradesh, India," World Bank Other Operational Studies 21822, The World Bank.
    15. 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, Springer;European Association of Environmental and Resource Economists, vol. 52(3), pages 369-393, July.

    More about this item

    Keywords

    Voluntary environmental regulation Duration analysis Propensity score matching Mexico;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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