Guilty Until Proven Innocent - Regulation with Costly and Limited Enforcement

Swierzbinski, Joseph

doi:10.1108/s0573-8555(1996)0000234018

Cited by 10 publications

(14 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Swierzbinski [31] and Bontems and Bourgeon [1] study an informational aspect complementary to the one we address in this paper. They consider a model of environmental taxes where the regulator that designs the environmental policy may observe the emission levels (through a costly audit), but does not know the firms' abatement costs.…”

Section: Introductionmentioning

confidence: 98%

Optimal enforcement policy and firms’ emissions and compliance with environmental taxes

Macho‐Stadler

Pérez‐Castrillo

2006

Journal of Environmental Economics and Management

View full text Add to dashboard Cite

In a market where firms with different characteristics decide upon both the level of emissions and their reports, we study the optimal audit policy for an enforcement agency whose objective is to minimize the level of emissions. We show that it is optimal to devote the resources primarily to the easiest-to-monitor firms and to those firms that value pollution the less. Moreover, unless the budget for monitoring is very large, there are always firms that do not comply with the environmental objective and others that do comply; but all of them evade the environmental taxes. r 2005 Elsevier Inc. All rights reserved.

show abstract

Section: Introductionmentioning

confidence: 98%

Optimal enforcement policy and firms’ emissions and compliance with environmental taxes

Macho‐Stadler

Pérez‐Castrillo

2006

Journal of Environmental Economics and Management

View full text Add to dashboard Cite

show abstract

“…Such a system can be optimal in a model of regulation with self-reporting [18]. However, the role of self-reporting in [18] is quite different than in our model because it arises as a result of the regulator's uncertainty about a firm's pollution abatement costs (absent any direct benefits of disclosure).…”

Section: Article In Pressmentioning

confidence: 87%

Regulation with direct benefits of information disclosure and imperfect monitoring

Evans

Gilpatric

Liu

2009

Journal of Environmental Economics and Management

View full text Add to dashboard Cite

a b s t r a c tWe model the optimal design of programs requiring heterogeneous firms to disclose harmful emissions when disclosure yields both direct and indirect benefits. The indirect benefit arises from the internalization of social costs and resulting reduction in emissions. The direct benefit results from the disclosure of previously private information which is valuable to potentially harmed parties. Previous theoretical and empirical analyses of such programs restrict attention to the former benefit while the stated motivation for such programs highlights the latter benefit. When disclosure yields both direct and indirect benefits, policymakers face a tradeoff between inducing truthful self-reporting and deterring emissions. Internalizing the social costs of emissions, such as through an emissions tax, will deter emissions, but may also reduce incentives for firms to truthfully report their emissions.

show abstract

“…Malik (1990) and Keeler (1991) analyze the efficiency of a transferable discharge permit system when firms may violate environmental regulations. Harrington (1988), Harford (1991), Segerson and Tietenberg (1992), Malik (1993), Garvie and Keeler (1994), and Swierzbsinski (1994) research the incentive mechanism design of punishment when firms may not be complying with environmental regulations. Polinsky and Shavell (2000) discuss how much of society's resources should be devoted to apprehending violators and if a violator is caught, whether the rule of liability should be strict or fault-based.…”

Section: Introductionmentioning

confidence: 99%

“…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.…”

Section: Introductionmentioning

confidence: 99%

Gresham’s law in environmental protection

Yang

2011

Environ Econ Policy Stud

View full text Add to dashboard Cite

Under incomplete environmental enforcement, the high-cost (less efficient) firm may strategically violate the environmental standard, causing the lowcost (more efficient) firm to exit the market-a phenomenon similar to Gresham's law in which bad money drives out good money. Tightening environmental regulation without increasing probability and penalties helps the high-cost firm to drive the low-cost firm out of the market. This explains why serious pollution and inefficient production co-exist in developing economies.

show abstract

Guilty Until Proven Innocent - Regulation with Costly and Limited Enforcement

Cited by 10 publications

References 4 publications

Optimal enforcement policy and firms’ emissions and compliance with environmental taxes

Optimal enforcement policy and firms’ emissions and compliance with environmental taxes

Regulation with direct benefits of information disclosure and imperfect monitoring

Gresham’s law in environmental protection

Contact Info

Product

Resources

About