Muddling Through while Environmental Regulatory Capacity Evolves: What Role for Voluntary Agreements?

The city of Leon, Guanajuato, is Mexico's leather goods capital and a notorious environmental hotspot. Over the past two decades, four high-profile voluntary agreements aimed at controlling pollution from Leon's tanneries have yielded few concrete results. To understand why, this paper reconstructs the history of these initiatives, along with that of local environmental regulatory capacity. Juxtaposing these two timelines suggests that the voluntary pollution control agreements were both motivated by-and undermined by-gaps in the legal, institutional, physical, and civic infrastructures needed to make regulation effective. Our analysis offers a concrete definition of environmental regulatory capacity, provides insights into how it evolves, and demonstrates its importance. Moreover, it sheds light on the question of whether voluntary environmental agreements-an increasingly popular regulatory tool-are likely to be effective in developing countries.