Effectiveness of environmental regulations under imperfect enforcement and the firm's avoidance behavior

Abstract

This paper explicitly defines enforcement quality and develops a model by incorporating enforcement quality and the firm's avoidance behavior. The results indicate that the effectiveness of environmental regulations is likely to depend upon the level of enforcement quality, as well as upon the nature of the firm's avoidance behavior. Policy instruments may become incompatible under certain circumstances. Enforcement quality should be properly targeted to enhance functional harmonization between instruments. The condition under which emission tax is more effective under imperfect enforcement than under complete enforcement is also identified. Copyright Kluwer Academic Publishers 1996enforcement quality, environmental regulation, penalty, avoidance behavior,

Bribery, hierarchical government, and incomplete environmental enforcement

“…However, a decrease in e may have an ambiguous effect on the equilibrium pollution abatement. Linder and McBride (1984) and Huang (1996) also reached a similar conclusion that a stricter emission standard may encourage or discourage pollution abatement efforts in a clean society. From the above discussion, we come up with the following proposition: Proposition 1.…”

Gresham’s law in environmental protection

“…The literature studying incomplete enforcement environmental policy includes Harford (1978Harford ( , 1991, Viscusi and Zeckhauser (1979), Harrington (1988), Jones (1989), Kambhu (1989), Shaffer (1990), Xepapadeas (1991), Malik (1990Malik ( , 1993, Keeler (1991), Segerson and Tietenberg (1992), Chua et al (1992), Swierzbsinski (1994), Garvie and Keeler (1994), Huang (1996), Lear and Maxwell (1998), Cohen (2000), 2 Heyes (2000), Polinsky and Shavell (2000), and Hu et al (2004). Harford (1978), Viscusi and Zeckhauser (1979), and Jones (1989) assume a perfect competition market structure and discuss the effects of environmental standards and penalties on environmental quality.…”

Economic Consequences of Invasive Species in ornamental sector in Mediterranean Basin: An Application to Citrus Canker

“…• Application of rules and regulations (See and Dwight, 1984;Kambhu, 1990;Oh, 1995;Huang, 1996; Kadambe and Segerson, 1998;Genovesi et al, 2014). Researches show the optimal application of rules, the effect of taxation on company profits (Knowler and Barbier, 2005), the level of moral hazard of companies, which can pursue their interests at the expense of the community, trusting in the impossibility, for the latter, to verify the presence of willfulness or negligence (Shogren et al, 1990), costs of institutional monitoring.…”