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Should you turn yourself in? The consequences of environmental self-policing

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  • Sarah L. Stafford

    (The College of William & Mary, Williamsburg, VA)

Abstract

Facilities that self-police under the Environmental Protection Agency's Audit Policy are eligible for reduced penalties on disclosed violations. This paper investigates whether self-policing has additional consequences; in particular, whether self-policing reduces future enforcement activity. Using data on U.S. hazardous waste enforcement and disclosures, I find that facilities that self-police are rewarded with a lower probability of inspection in the future, although facilities with good compliance records receive a smaller benefit than facilities with poor records. Additionally, facilities that are inspected frequently are more likely to disclose than facilities that face a low probability of inspection. The results suggest that facilities may be able to strategically disclose in order to decrease future enforcement. © 2007 by the Association for Public Policy Analysis and Management

Suggested Citation

  • Sarah L. Stafford, 2007. "Should you turn yourself in? The consequences of environmental self-policing," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(2), pages 305-326.
  • Handle: RePEc:wly:jpamgt:v:26:y:2007:i:2:p:305-326
    DOI: 10.1002/pam.20249
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    References listed on IDEAS

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    1. Alexander Pfaff & Chris William Sanchirico, 2004. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 415-432.
    2. Innes, Robert, 2000. "Self-Reporting in Optimal Law Enforcement When Violators Have Heterogeneous Probabilities of Apprehension," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 287-300, January.
    3. Heyes, Anthony G., 1996. "Cutting environmental penalties to protect the environment," Journal of Public Economics, Elsevier, vol. 60(2), pages 251-265, May.
    4. Friesen, Lana, 2003. "Targeting enforcement to improve compliance with environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 72-85, July.
    5. Livernois, John & McKenna, C. J., 1999. "Truth or consequences: Enforcing pollution standards with self-reporting," Journal of Public Economics, Elsevier, vol. 71(3), pages 415-440, March.
    6. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
    7. Morgenstern, Richard, 1996. "Does the Provision of Free Technical Information Really Influence Firm Behavior?," Discussion Papers dp-96-16, Resources For the Future.
    8. Harford, Jon D. & Harrington, Winston, 1991. "A reconsideration of enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 45(3), pages 391-395, August.
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    Cited by:

    1. 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.
    2. Mary Evans & Lirong Liu & Sarah Stafford, 2011. "Do environmental audits improve long-term compliance? Evidence from manufacturing facilities in Michigan," Journal of Regulatory Economics, Springer, vol. 40(3), pages 279-302, December.
    3. Sarah Stafford, 2013. "How predictable are environmental compliance inspections?," Journal of Regulatory Economics, Springer, vol. 44(3), pages 361-388, December.
    4. Earnhart, Dietrich & Harrington, Donna Ramirez, 2014. "Effect of audits on the extent of compliance with wastewater discharge limits," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 243-261.
    5. Etienne, Julien, 2010. "Self-reporting untoward events to external controllers: accounting for reporting failure by a top tier chemical plant," LSE Research Online Documents on Economics 36546, London School of Economics and Political Science, LSE Library.
    6. 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.
    7. Evans, Mary F. & Liu, Lirong & Stafford, Sarah L., 2015. "Standardization and the impacts of voluntary program participation: Evidence from environmental auditing," International Review of Law and Economics, Elsevier, vol. 43(C), pages 10-21.
    8. repec:kap:regeco:v:52:y:2017:i:2:d:10.1007_s11149-017-9329-7 is not listed on IDEAS
    9. Valentina Mele & Donald Schepers, 2013. "E Pluribus Unum? Legitimacy Issues and Multi-stakeholder Codes of Conduct," Journal of Business Ethics, Springer, vol. 118(3), pages 561-576, December.

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