Abstract
Colombia's Cauca Valley Corporation has a reputation for high-quality work in controlling water pollution. The corporation's regulatory programme, which includes both traditional regulation and a system of effluent charges, reflects both learning by doing and learning by exploration. The successful creation of the programme is explained in terms of the learning that led the corporation to emphasize cooperation with industry, to de-emphasize strict enforcement of regulations, and to experiment with effluent charges. Significantly, the charge scheme was effective because the effluent fees paid by firms were publicized in newspapers and the publicity influenced the reputations and decisions of company leaders.
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