Monitoring and Enforcement: Is Two-Tier Regulation Robust?

Thomas Sterner and Vinish Kathuria

RFF Working Paper Series from Resources for the Future

Abstract: The regulation of industrial pollution is clearly difficult in a rapidly industrializing, low-income setting. In addition to the general lack of resources for monitoring and enforcement, authorities must deal with the asymmetric nature of the information and multiple nonpoint sources of pollution. In this study we look at efforts to regulate chemical plants in Ankleshwar, in the Indian state of Gujarat. The plants are located in an industrial estate, which provides interesting preconditions for a form of two-tier regulation, in which an industry association becomes an intermediary between the government and individual firms: it monitors its members’ pollution and promotes compliance with the government’s environmental regulations. The Indian agency responsible for environmental protection cannot effectively control the many small individual plants within such estates. The local industry association is much better informed and has an incentive to regulate its members to maintain a good reputation but does not possess much formal authority, and its voluntary monitoring and abatement program is akin to managing a common property resource. We study four preconditions for the success of such management: suitable design principles, effective monitoring, objective implementation of rules, and enforcement. We show that these conditions are satisfied at least to some extent in Ankleshwar and that the fines decrease pollution.

Keywords: Industrial estate; two-tier monitoring; common property resource; industry association; nonpoint sources of pollution (search for similar items in EconPapers)
JEL-codes: K42 P28 Q25 (search for similar items in EconPapers)
Date: 2002-05-31
New Economics Papers: this item is included in nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.rff.org/RFF/documents/RFF-DP-02-17.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.rff.org/RFF/documents/RFF-DP-02-17.pdf [301 Moved Permanently]--> https://www.rff.org/RFF/documents/RFF-DP-02-17.pdf)

Related works:
Working Paper: Monitoring and Enforcement: Is Two-Tier Regulation Robust? (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rff:dpaper:dp-02-17

Access Statistics for this paper

More papers in RFF Working Paper Series from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by Resources for the Future ().