Environmental regulation informed by biased stakeholders

Stefan Ambec () and Jessica Coria
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Stefan Ambec: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Jessica Coria: Aarhus University [Aarhus]

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Abstract: Public consultations are widely used in regulatory processes, allowing stakeholders to present their viewpoints despite their inherent biases. Some stakeholders, such as firms, are known to be pro-business, while others, such as environmental NGOs, are pro-environment. Others, such as national authorities have unknown biases. We develop a framework to analyze how a regulator processes information provided by biased stakeholders. We show that the regulator follows the advice that runs counter to a stakeholder's typical bias: to regulate if firms so advise and not to regulate if environmental organizations so advise. Without such advice, she prioritizes the com ments from stakeholders with unknown biases. We then contrast our theoretical results with the regulation of chemicals in the European Union. Consistent with the model's predictions, support for regulation is more strongly associated with regulatory outcomes when it comes from firms than from NGOs or environmental organizations. We also find that regulatory decisions are more strongly correlated with comments from national authorities than from other stakeholders, both in terms of participation and relative support.

Keywords: REACH; Chemicals; Private politics; Biased expertise; Cheap talk; Incomplete information; Environmental policy (search for similar items in EconPapers)
Date: 2026-06
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Published in Journal of Environmental Economics and Management, 2026, 138, pp.103334. ⟨10.1016/j.jeem.2026.103334⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05654821

DOI: 10.1016/j.jeem.2026.103334

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