IDEAS home Printed from https://ideas.repec.org/a/taf/jenpmg/v41y1998i2p217-226.html
   My bibliography  Save this article

On the Role of Fines as an Environmental Enforcement Tool

Author

Listed:
  • Surabhi Kadambe
  • Kathleen Segerson

Abstract

This paper provides a theoretical analysis of enforcement and compliance decisions when the enforcement process involves significant interaction between a source of violation and enforcer. We show that the comparative static effects of a fine on the probability of a violation consist of a direct effect, which refers to the effect of an increase in the fine on the expected cost of a violation holding the probabilities of enforcementrelated decisions constant, and an indirect effect, which refers to the effect of the fine on the probability of a violation through its effect on the probabilities of enforcement actions taken by the regulator. We show that, in the absence of the indirect effects, an increase in the fine unambiguously reduces the probability of a violation and hence should lead to lower pollution (as expected). However, if the indirect effects are positive and large, an increase in the fine can actually reduce the likelihood that a firm will comply with environmentalregulations. Thus, the increased fines do not necessarily increase compliance incentives.

Suggested Citation

  • Surabhi Kadambe & Kathleen Segerson, 1998. "On the Role of Fines as an Environmental Enforcement Tool," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 41(2), pages 217-226.
    • Handle: RePEc:taf:jenpmg:v:41:y:1998:i:2:p:217-226
    DOI: 10.1080/09640569811722
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09640569811722
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09640569811722?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Earnhart, Dietrich, 2004. "Regulatory factors shaping environmental performance at publicly-owned treatment plants," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 655-681, July.
    2. May Cheung & Jun Zhuang, 2012. "Regulation Games Between Government and Competing Companies: Oil Spills and Other Disasters," Decision Analysis, INFORMS, vol. 9(2), pages 156-164, June.
    3. Takayoshi Shinkuma & Shunsuke Managi, 2012. "Effectiveness of policy against illegal disposal of waste," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(2), pages 123-145, April.
    4. Jin-Li Hu & Chung-Huang Huang & Wei-Kai Chu, 2004. "Bribery, hierarchical government, and incomplete environmental enforcement," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 6(3), pages 177-196, September.
    5. Dongryul Lee & Kyung Hwan Baik, 2017. "Concealment and verification over environmental regulations: a game-theoretic analysis," Journal of Regulatory Economics, Springer, vol. 51(3), pages 235-268, June.
    6. Nuno Garoupa, 2004. "Punish Once or Punish Twice: A Theory of the Use of Criminal Sanctions in Addition to Regulatory Penalties," American Law and Economics Review, American Law and Economics Association, vol. 6(2), pages 410-433.
    7. Vicki M. Bier & Shi‐Woei Lin, 2013. "Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?," Risk Analysis, John Wiley & Sons, vol. 33(2), pages 281-291, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jenpmg:v:41:y:1998:i:2:p:217-226. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CJEP20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.