Ambient environmental inspections and commitment towards enforcement policies: substitutes or complements?

Laurent Franckx

The B.E. Journal of Economic Analysis & Policy, 2002, vol. 2, issue 1, 1-20

Abstract: We consider an inspection game between polluting firms and an environmental enforcement agency that can inspect ambient pollution before inspecting individual firms. We assume that the enforcement agency's objectives do not perfectly correspond with the objectives of the legislative body who determines the standards for compliance and the fines for non-compliance, and that the enforcement agency can determine its inspection policy independently. However, contrary to Franckx (2002), we assume that the agency can commit to inspection probabilities. We show that this commitment power radically changes the value of ambient inspections.

Date: 2002
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DOI: 10.2202/1538-0653.1026

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