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Environmental Regulations and Corruption: Automobile Emissions in Mexico City

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  • Paulina Oliva

Abstract

Emission regulations become more prevalent in developing countries, but they may be compromised by corruption. This paper documents the prevalence of corruption and the effectiveness of vehicle emission regulations in Mexico City. I develop a statistical test for identifying a specific type of cheating that involves bribing center technicians. I also estimate a structural model of car owner retesting and cheating decisions. Results suggest that 9.6 percent of car owners paid US$20 to circumvent the regulation. Eliminating cheating and increasing the cost of retests would reduce emissions by 3,708 tons at a high cost for vehicle owners.

Suggested Citation

  • Paulina Oliva, 2015. "Environmental Regulations and Corruption: Automobile Emissions in Mexico City," Journal of Political Economy, University of Chicago Press, vol. 123(3), pages 686-724.
  • Handle: RePEc:ucp:jpolec:doi:10.1086/680936
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    File URL: http://dx.doi.org/10.1086/680936
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    References listed on IDEAS

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    1. Eva Arceo & Rema Hanna & Paulina Oliva, 2016. "Does the Effect of Pollution on Infant Mortality Differ Between Developing and Developed Countries? Evidence from Mexico City," Economic Journal, Royal Economic Society, vol. 126(591), pages 257-280, March.
    2. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 843-877.
    3. Ghanem, Dalia & Zhang, Junjie, 2014. "‘Effortless Perfection:’ Do Chinese cities manipulate air pollution data?," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 203-225.
    4. Olken, Benjamin A., 2006. "Corruption and the costs of redistribution: Micro evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 853-870, May.
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    Cited by:

    1. Sánchez-Fung, José R., 2016. "Modelling the link between aggregate income and carbon dioxide emissions in developing countries: The case of the Dominican Republic," MPRA Paper 68958, University Library of Munich, Germany.
    2. Pedro Naso & Yi Huang Author Name: Tim Swanson, 2017. "The Porter Hypothesis Goes to China: Spatial Development, Environmental Regulation and Productivity," CIES Research Paper series 53-2017, Centre for International Environmental Studies, The Graduate Institute.
    3. repec:bla:ecinqu:v:55:y:2017:i:3:p:1511-1537 is not listed on IDEAS
    4. repec:eee:jeeman:v:86:y:2017:i:c:p:262-276 is not listed on IDEAS
    5. Pedro Naso Author name: Tim Swanson, 2017. "How Does Environmental Regulation Shape Economic Development? A Tax Competition Model of China," CIES Research Paper series 54-2017, Centre for International Environmental Studies, The Graduate Institute.
    6. Thomas Stoerk, 2017. "Compliance, Efficiency and Instrument Choice: Evidence from air pollution control in China," GRI Working Papers 273, Grantham Research Institute on Climate Change and the Environment.
    7. repec:eee:wdevel:v:99:y:2017:i:c:p:271-284 is not listed on IDEAS
    8. Nano Barahona & Francisco Gallego & Juan-Pablo Montero, 2018. "Vintage-specific driving restrictions," DOUMENTOS DE TRABAJO LACEA 016259, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA.
    9. James B. Ang & Per G. Fredriksson, 2017. "Statehood Experience, Legal Traditions, And Climate Change Policies," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1511-1537, July.

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