Do Manufacturers Pollute Less Under the Regulation-Through-Information Regime? What Plant-Level Data Tell Us

Abstract

Because past studies on the effects of right-to-know laws have relied on highly aggregated data, it is still unknown whether being located in a state with a funded right-to-know program has a significant effect on the environmental performance of individual manufacturing plants. Nor has it been shown that such effects exist net of other plant characteristics that are known to increase pollution. To remedy this situation, we have used plant-level data from the EPA's Toxics Release Inventory to test the effects of states' right-to-know programs on the toxic emissions of chemical plants in 1990 and 2000. Consistent with several organizational theories (neoinstitutionalism, organizational ecology, and the resource dependence framework) that stress how regulatory policies are just one of several institutional forces that bear on organizations, our findings reveal that states' right-to-know programs have had no significant net effect on plants' toxic emissions. In addition to raising questions about the efficacy of information disclosure laws, our results underscore the importance of approaching pollution as an organizational phenomenon and studying organizations where they most directly impact the environment-at the site of production.