Munich Personal RePEc Archive

Enforcement and over-compliance

Shimshack, Jay P. and Ward, Michael B. (2007): Enforcement and over-compliance. Published in: Journal of Environmental Economics and Management , Vol. 1, No. 55 (January 2008): pp. 90-105.

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Abstract

Economists generally view environmental enforcement as a tool to secure compliance with regulations. This paper demonstrates that credible enforcement significantly increases statutory over-compliance with regulations as well. We find that many plants with discharges typically below legally permitted levels reduce discharges further when regulators issue fines, even on other plants. Also, non-compliant plants often respond to sanctions by reducing discharges well beyond reductions required by law. Thus, increased enforcement generates substantial discharge reductions above and beyond those expected from simply deterring violations.

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