Abstract
Abstract Increasing competition over decreasing water supply and rapid growth of small and medium enterprises lacking pollution control measures suggest the need for improved institutional framework to manage effluent discharge. The research analyzes the adequacy of institutional arrangements and instruments for managing industrial effluent discharge in Yogyakarta, Indonesia through case study and in-depth interviews with purposive sampling. Results suggest overemphasis on prescriptive measures, lack of adequate coordination mechanisms, and lack of effective policy instruments for pollution control among small enterprises. It is necessary to establish an umbrella agency with cross-cutting authority for consistency, to differentiate regulatory and economic instruments for the various industries, to reduce the number of environmental permits, and to introduce incentives for developing industrial estates. Industries contemplate on their actions as the general public is notified of their environmental standing through media coverage within the Clean River Program.
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