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Environmental Enforcement and Compliance: Lessons from Pollution, Safety, and Tax Settings

Author

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  • Alm, James
  • Shimshack, Jay

Abstract

Environmental monitoring and enforcement are controversial and incompletely understood. This survey reviews what we do and do not know about the overall effectiveness, as well as the cost effectiveness, of pollution monitoring and enforcement. We ask five key questions: what do environmental monitoring and enforcement actions look like in the real world? How do we assess environmental compliance and deterrence? Do environmental monitoring and enforcement actions get results? How, why, and when do inspections and sanctions achieve compliance and reduce pollution? And, what do the answers to the preceding questions tell us about designing and implementing more effective and more cost effective public policies for the environment? A key contribution is drawing lessons from diverse sources, including insights from theoretical, empirical, and experimental contributions in environmental, tax, and safety settings. We conclude that traditional environmental monitoring and enforcement actions generate important deterrence effects. However, there are limits to such deterrence, and deterrence itself cannot fully explain all patterns of environmental behavior. Encouraging compliance requires both traditional tools and additional tools.

Suggested Citation

  • Alm, James & Shimshack, Jay, 2014. "Environmental Enforcement and Compliance: Lessons from Pollution, Safety, and Tax Settings," Foundations and Trends(R) in Microeconomics, now publishers, vol. 10(4), pages 209-274, December.
    • Handle: RePEc:now:fntmic:0700000048
    DOI: 10.1561/0700000048
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    Cited by:

    1. James Alm, 2017. "Is Economics Useful for Public Policy?," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 835-854, April.
    2. Browne, Oliver R. & Gazze, Ludovica & Greenstone, Michael & Rostapshova, Olga, 2022. "Man vs. Machine : Technological Promise and Political Limits of Automated Regulation Enforcement," CAGE Online Working Paper Series 646, Competitive Advantage in the Global Economy (CAGE).
    3. James Alm & Matthias Kasper, 2020. "Laboratory Experiments," Working Papers 2008, Tulane University, Department of Economics.
    4. Timothy N. Cason & Lana Friesen & Lata Gangadharan, 2021. "Complying with environmental regulations: experimental evidence," Chapters, in: Ananish Chaudhuri (ed.), A Research Agenda for Experimental Economics, chapter 4, pages 69-92, Edward Elgar Publishing.
    5. James Alm & Jeremy Clark & Kara Leibel, 2016. "Enforcement, Socioeconomic Diversity, and Tax Filing Compliance in the United States," Southern Economic Journal, John Wiley & Sons, vol. 82(3), pages 725-747, January.
    6. Beatty, Timothy & Shimshack, Jay P., "undated". "Monitoring and Enforcement in a Food Safety Context," 2018 Annual Meeting, August 5-7, Washington, D.C. 273913, Agricultural and Applied Economics Association.
    7. David Silver, 2021. "Democratic Governance and the Ethics of Market Compliance," Journal of Business Ethics, Springer, vol. 173(3), pages 525-537, October.
    8. Kejia Hu & Sunil Chopra & Yuche Chen, 2021. "The Effect of Tightening Standards on Automakers’ Non‐compliance," Production and Operations Management, Production and Operations Management Society, vol. 30(9), pages 3094-3115, September.
    9. Earnhart, Dietrich & Friesen, Lana, 2024. "The effect of professional social norms on corporate environmental compliance," Resource and Energy Economics, Elsevier, vol. 79.
    10. James Alm, 2017. "Is Economics Useful for Public Policy?," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 835-854, April.
    11. Gupta, Shreekant & Saksena, Shalini & Baris, Omer F., 2019. "Environmental enforcement and compliance in developing countries: Evidence from India," World Development, Elsevier, vol. 117(C), pages 313-327.

    More about this item

    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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