Evidence of How Electronic Reporting and Automated Auditing Affects Regulatory Compliance and Environmental Performance

Wayne Gray, Ron Shadbegian and Ann Wolverton

No 35525, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate whether, by providing better and more timely information, the first mandatory online reporting and auditing program for wastewater discharge releases in the U.S. improved facility compliance and environmental performance, while also allowing state regulators to more effectively monitor and enforce regulations. Examining reporting programs with automated feedback features can also offer insights into the potential for artificial intelligence-based tools to improve compliance and environmental performance. Difference-in-difference results suggest that the program resulted in significant increases in the completeness of reporting and reductions in discharges but also greater reported violations. We find that effects are larger for minor dischargers and publicly owned facilities. We also find evidence consistent with the more efficient targeting of inspections by state authorities towards plants with a history of recent noncompliance, which could be a potential mechanism driving these results.

JEL-codes: Q53 Q58 (search for similar items in EconPapers)
Date: 2026-07
Note: EEE
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