Do Environmental Audits Improve Long-term Compliance? Evidence from Manufacturing Facilities in Michigan
The role of compliance assistance in the U.S. EPA’s overall enforcement strategy has been quite variable over the past decade and a half, increasing in prominence under the Bush administration and now slated for significantly reduced funding under the Obama administration. While many theoretical models and anecdotal evidence suggest that compliance assistance should play some role in a comprehensive enforcement strategy, to date there has been relatively little empirical evidence on the actual effectiveness of existing compliance assistance programs. To help inform the debate over the appropriate use of compliance assistance, this paper uses data on hazardous waste generators nationwide to assess the effect of federal compliance assistance programs in improving compliance with hazardous waste regulations. The paper also conducts a direct empirical analysis of the relationship between traditional enforcement tools and compliance assistance. The results show that federal compliance assistance efforts do increase compliance, but the evidence does not suggest any specific relationship between traditional enforcement and compliance assistance. Also, while states do not appear to substitute federal compliance assistance for traditional enforcement, state compliance assistance programs do appear to decrease the likelihood of inspections among the smallest hazardous waste generators.
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