An Integrated Strategy to Reduce Monitoring and Enforcement Costs

E. Hentschel and A. Randall

Environmental & Resource Economics, 2000, vol. 15, issue 1, 57-74

Abstract: A policy of effective environmental protection, inthe present political atmosphere, will requirelow-cost monitoring and enforcement (M&E) strategiesthat do not rely on draconian penalties. Infinite oreven very high penalties for environmental violationsare socially and politically unacceptable.Environmental violations are often classed as civiloffenses, and the occurrence of a violation may bethought insufficient to establish intent. If penaltiesare upper-bounded and each firm is inspected randomly,compliance cannot be maintained with arbitrarily smallinspection probabilities and, hence, small agencycosts. In this paper we examine possibilities forreducing agency M&E costs, including the requirementfor self-reports of effluents and the adjustment ofthe inspection probability to reflect a firm'scompliance or reporting reputation. Copyright Kluwer Academic Publishers 2000

Keywords: enforcement; reputation; self-reports (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (6)

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DOI: 10.1023/A:1008348915460

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