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The Effect of Inspector Group Size and Familiarity on Enforcement and Deterrence

  • Muehlenbachs, Lucija


    (Resources for the Future)

  • Staubli, Stefan
  • Cohen, Mark A.

This paper provides new insights into the productivity of teams and the relationship between the inspector and the inspected party by examining data on inspections of o shore oil and gas platforms in the Gulf of Mexico. We exploit weather patterns that only influence the number of inspectors that are sent to inspect a platform and show that inspector group size matters; an additional inspector results in more severe sanctions being issued. We also exploit the agglomeration of two inspection offices to examine the eff ect of reducing the familiarity between an inspector and an inspected party; we fi nd that reducing the inspector-o ffender relationship also results in more severe sanctions being issued. Combined, these findings are consistent with regulatory capture and related concerns about insulating inspectors from undue influence by those they are supposed to monitor. Using these shifts in sanction severity we also estimate the eff ectiveness of increasing enforcement on the deterrence of incidents, such as oil spills, res, injuries, or fatalities. We only fi nd weak evidence that increasing sanction severity increases deterrence.

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Paper provided by Resources For the Future in its series Discussion Papers with number dp-13-36.

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Date of creation: 08 Nov 2013
Date of revision:
Handle: RePEc:rff:dpaper:dp-13-36
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  1. Helen Bernhard & Ernst Fehr & Urs Fischbacher, 2006. "Group Affiliation and Altruistic Norm Enforcement," American Economic Review, American Economic Association, vol. 96(2), pages 217-221, May.
  2. Benabou, Roland, 2013. "Groupthink: Collective Delusions in Organizations and Markets," IZA Discussion Papers 7322, Institute for the Study of Labor (IZA).
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  13. Gray, Wayne B. & Deily, Mary E., 1996. "Compliance and Enforcement: Air Pollution Regulation in the U.S. Steel Industry," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 96-111, July.
  14. Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-59, January.
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  17. repec:cup:cbooks:9780521632935 is not listed on IDEAS
  18. Luis Garicano & Ignacio Palacios-Huerta & Canice Prendergast, 2005. "Favoritism Under Social Pressure," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 208-216, May.
  19. Montserrat Grau & Theodore Groves, 1997. "The Oil Spill Process: The Effect of Coast Guard Monitoring on Oil Spills," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(4), pages 315-339, December.
  20. Cohen, Mark A, 1987. "Optimal Enforcement Strategy to Prevent Oil Spills: An Application of a Principal-Agent Model with Moral Hazard," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 23-51, April.
  21. Yan Chen & Sherry Xin Li, 2009. "Group Identity and Social Preferences," American Economic Review, American Economic Association, vol. 99(1), pages 431-57, March.
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  26. repec:cup:cbooks:9780521659123 is not listed on IDEAS
  27. W. Kip Viscusi, 1986. "The Impact of Occupational Safety and HealthRegulation, 1973-83," University of Chicago - George G. Stigler Center for Study of Economy and State 40, Chicago - Center for Study of Economy and State.
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