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Environmental enforcement and compliance in developing countries: Evidence from India

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  • Gupta, Shreekant
  • Saksena, Shalini
  • Baris, Omer F.

Abstract

Effective implementation of environmental regulations is an important concern for emerging economies that face serious environmental degradation. In this paper we analyze compliance and enforcement of environmental regulations in India. In particular, we model: (i) plant-level compliance with water and air pollution control laws in the state of Punjab, and (ii) the decisions of the regulatory agency, namely, the Punjab Pollution Control Board to enforce these laws through inspections and other administrative actions. The two decisions are interrelated. For a sample of 117 large water polluting plants and 109 large air polluting plants the probability of inspection influences plant-level compliance and vice versa. We also find enforcement activity is targeted towards frequent violators. Plants that belong to dirty industries are more stringently monitored but those belonging to more profitable firms less so. Plants with high abatement costs and those that are new comply less frequently.

Suggested Citation

  • Gupta, Shreekant & Saksena, Shalini & Baris, Omer F., 2019. "Environmental enforcement and compliance in developing countries: Evidence from India," World Development, Elsevier, vol. 117(C), pages 313-327.
    • Handle: RePEc:eee:wdevel:v:117:y:2019:i:c:p:313-327
    DOI: 10.1016/j.worlddev.2019.02.001
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    More about this item

    Keywords

    Pollution; Environmental enforcement; Inspection; Monitoring; Asia; India;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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