EFFECT OF COOPERATIVE ENFORCEMENT STRATEGIES ON WASTEWATER MANAGEMENT

Abstract

This paper examines the influence of the environmental enforcement approach on the effects of government interventions on corporate environmental management. The paper contrasts a potentially innovative cooperative approach with the standard coercive approach. Empirical results show that the effectiveness of enforcement at inducing better environmental management depends on the overall regulatory enforcement approach. For example, greater cooperation undermines the effectiveness of more severe enforcement forms. Specifically, as the environmental enforcement approach becomes more cooperative, the effectiveness of federal inspections and monetary penalties decreases. These results generally demonstrate that a cooperative enforcement approach proves less effective than a coercive approach. (JEL D22, K32, Q52, Q58)