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Voluntary Environmental Agreements when Regulatory Capacity is Weak1

Author

Listed:
  • Allen Blackman

    (Resources for the Future, 1616 P Street, N.W., Washington, DC 20036, USA.)

  • Thomas P Lyon

    (Stephen M. Ross School of Business, University of Michigan, 701 Tappan St., Ann Arbor, MI 48109, USA.)

  • Nicholas Sisto

    (Department of Economics, Instituto Tecnológico y de Estudios Superiores de Monterrey, Ave. E. Garza Sada 2501 Sur C.P. 64849, Monterrey, NL, Mexico.)

Abstract

Voluntary agreements (VAs) negotiated between environmental regulators and industry are increasingly popular. However, little is known about whether they are likely to be effective in developing and transition countries where local and federal environmental regulatory capacity is typically weak. We develop a dynamic theoretical model to examine the effect of VAs on investment in regulatory infrastructure and pollution abatement in such countries. We find that under certain conditions, VAs can improve welfare by generating more private-sector investment in pollution control and more public-sector investment in regulatory capacity than the status quo. Comparative Economic Studies (2006) 48, 682–702. doi:10.1057/palgrave.ces.8100189

Suggested Citation

  • Allen Blackman & Thomas P Lyon & Nicholas Sisto, 2006. "Voluntary Environmental Agreements when Regulatory Capacity is Weak1," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(4), pages 682-702, December.
    • Handle: RePEc:pal:compes:v:48:y:2006:i:4:p:682-702
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    Citations

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    Cited by:

    1. Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer.
    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. Zixiao Liu & Zengming Wu & Mengnan Zhu, 2022. "Research on the Green Effect of Environmental Policies—From the Perspective of Policy Mix," Sustainability, MDPI, vol. 14(23), pages 1-15, November.
    4. Kalim Shah & Jorge Rivera, 2008. "Export processing zones and corporate environmental performance in emerging economies: The case of the oil, gas, and chemical sectors of Trinidad and Tobago," Policy Sciences, Springer;Society of Policy Sciences, vol. 41(2), pages 181-182, June.
    5. 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.
    6. Brice Foulon & Sylvain Marsat, 2023. "Does environmental footprint influence the resilience of firms facing environmental penalties?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 6154-6168, December.

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