An Integrated Strategy to Reduce Monitoring and Enforcement Costs |
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Authors: | E Hentschel A Randall |
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Institution: | (1) Lehrstuhl fuer Agrarpolitik, 85350 Freising-Weihenstephan, Germany |
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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. |
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Keywords: | enforcement reputation self-reports |
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