Quota Enforcement in Resource Industries: Self-Reporting and Differentiated Inspections
Quotas or permits are frequently used in the management of renewable resources and emissions. However, in many industries there is concern about the basic e ectiveness of quotas due to non-compliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with signi cant non-compliance and exogenous constraints on nes and enforcement budget. We propose a new enforcement system based on self-reporting of excess extraction and explicit di erentiation of inspection rates based on compliance history. In particular, we use state-dependent enforcement to induce rms to self-report excess extraction. We show that such system increases the e ectiveness of quota management by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement, while ensuring an ecient allocation of aggregate extraction. In addition, inspection costs can be reduced without reductions in welfare.
|Date of creation:||Sep 2010|
|Date of revision:||May 2011|
|Contact details of provider:|| Web page: http://www.ifro.ku.dk/english/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Malik Arun S., 1993. "Self-Reporting and the Design of Policies for Regulating Stochastic Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 241-257, May.
- Macho-Stadler, Ines & Perez-Castrillo, David, 2006.
"Optimal enforcement policy and firms' emissions and compliance with environmental taxes,"
Journal of Environmental Economics and Management,
Elsevier, vol. 51(1), pages 110-131, January.
- Inés Macho-Stadler & David Pérez-Castrillo, 2004. "Optimal Enforcement Policy and Firm's Emissions and Compliance with Environmental Taxes," Working Papers 124, Barcelona Graduate School of Economics.
- Inés Macho-Stadler & David Pérez-Castrillo, 2004. "Optimal Enforcement Policy and Firms' Emissions and Compliance with Environmental Taxes," UFAE and IAE Working Papers 612.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Ines Macho-Stadler & David Pérez-Castrillo, 2004. "Optimal Enforcement Policy and Firms’ Emissions and Compliance with Environmental Taxes," CESifo Working Paper Series 1193, CESifo Group Munich.
- Michael W. Toffel, 2008. "Coerced Confessions: Self-Policing in the Shadow of the Regulator," Journal of Law, Economics and Organization, Oxford University Press, vol. 24(1), pages 45-71, May.
- Innes, Robert, 1999. "Remediation and self-reporting in optimal law enforcement," Journal of Public Economics, Elsevier, vol. 72(3), pages 379-393, June.
- Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-396, March.
- Anton, W.R.Q.Wilma Rose Q. & Deltas, George & Khanna, Madhu, 2004. "Incentives for environmental self-regulation and implications for environmental performance," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 632-654, July.
- Anton, Wilma Rose Q. & Deltas, George & Khanna, Madhu, 2002. "Incentives for Environmental Self-Regulation and Implications for Environmental Performance," Working Papers 02-0120, University of Illinois at Urbana-Champaign, College of Business.
- Innes, Robert, 2001. "Violator Avoidance Activities and Self-Reporting in Optimal Law Enforcement," Journal of Law, Economics and Organization, Oxford University Press, vol. 17(1), pages 239-256, April.
- Sandmo, Agnar, 2000. "The Public Economics of the Environment," OUP Catalogue, Oxford University Press, number 9780198297987, April.
- Evans, Mary F. & Gilpatric, Scott M. & Liu, Lirong, 2009. "Regulation with direct benefits of information disclosure and imperfect monitoring," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 284-292, May.
- Carlos Chavez & Hugo Salgado, 2005. "Individual Transferable Quota Markets under Illegal Fishing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(3), pages 303-324, 07.
- Eric Helland, 1998. "The Enforcement Of Pollution Control Laws: Inspections, Violations, And Self-Reporting," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 141-153, February.
- Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
- Smith, Vernon L, 1969. "On Models of Commercial Fishing," Journal of Political Economy, University of Chicago Press, vol. 77(2), pages 181-198, March/Apr.
- Jon G. Sutinen & Peder Andersen, 1985. "The Economics of Fisheries Law Enforcement," Land Economics, University of Wisconsin Press, vol. 64(4), pages 387-397.
- Sumaila, U.R. & Alder, J. & Keith, H., 2006. "Global scope and economics of illegal fishing," Marine Policy, Elsevier, vol. 30(6), pages 696-703, November.
- Konar, Shameek & Cohen, Mark A., 1997. "Information As Regulation: The Effect of Community Right to Know Laws on Toxic Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 109-124, January.
- Greenberg, Joseph, 1984. "Avoiding tax avoidance: A (repeated) game-theoretic approach," Journal of Economic Theory, Elsevier, vol. 32(1), pages 1-13, February.
- Heyes, Anthony & Rickman, Neil, 1999. "Regulatory dealing - revisiting the Harrington paradox," Journal of Public Economics, Elsevier, vol. 72(3), pages 361-378, June.
- 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.
- Lee G. Anderson & Dwight R. Lee, 1986. "Optimal Governing Instrument, Operation Level, and Enforcement in Natural Resource Regulation: The Case of the Fishery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 678-690.
- 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.
- Louis Kaplow & Steven Shavell, 1991. "Optimal Law Enforcement with Self-Reporting of Behavior," NBER Working Papers 3822, National Bureau of Economic Research, Inc.
- William J. Furlong, 1991. "The Deterrent Effect of Regulatory Enforcement in the Fishery," Land Economics, University of Wisconsin Press, vol. 67(1), pages 116-129.
- Milliman, Scott R., 1986. "Optimal fishery management in the presence of illegal activity," Journal of Environmental Economics and Management, Elsevier, vol. 13(4), pages 363-381, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:foi:wpaper:2010_10. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geir Tveit)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.