Abstract
This paper presents new evidence for environmental offenses in Brazil. IBAMA’s strategy to deter violations is based on large operations and on decapitalizing offenders to signal its will to monitor and enforce the law, addressing the following questions: Do the sanctions applied by IBAMA, especially sanction charges, deter actual and potential offenders? Are there any spatial or temporal patterns affecting violations? This work contributes to the existing research by providing evidence for Brazil and by incorporating spatial controls in a dynamic panel approach to explain infractions against the environment. The data comes from an extensive database on offenses against flora and applied fines for Brazilian municipalities between 1998-2015. A new Spatial Dynamic Limited Information Maximum Likelihood (SDLIML) approach is proposed to address the additional endogeneity between fines and values of penalties. Results show that there is a pedagogic deterrent effect associated with applied fine values. Sanction charges are important to discourage new offenses.
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