Effectiveness of the EPA's Regulatory Enforcement: The Case of Industrial Effluent Standards (original) (raw)

1990, The Journal of Law and Economics

I. INTRODUCTION IN the almost two decades since the initial wave of social regulation, the academic literature documented very few, if any, instances of a health, safety, or environmental regulation being an unqualified success. Indeed, in most cases, the problem is even more fundamental. The typical analysis of government regulation found that the regulation did not even fulfill its primary mission, much less pass a more demanding benefit-cost test. This absence of a well-documented case study of effective social regulation may be due, in part, to the particular set of regulations selected for analysis. There is certainly no inherent economic reason why such regulations cannot play a productive role in our economy. In the case of environmental quality, for example, the externality problems being addressed are not handled well by markets, implying that government regulation has at least the potential for playing a beneficial role. However, this potential will not be realized if the regulations are ill conceived or not effectively enforced, or if the environmental problem has no feasible solution. A brief review of past regulatory experiences may be instructive to put in better perspective the Environmental Protection Agency's (EPA) water pollution control effort-the focus of this article. Most of these detailed evaluations have been done with respect to agencies other than the EPA. * This work was completed under two Cooperative Agreements from the U.S. Environmental Protection Agency, one to Duke University (CR811902-02) and one to Northwestern University (CR81302-01). We thank Alan Carlin, who was invaluable in facilitating the research process, and the many people at the EPA who so kindly assisted us with obtaining the data and understanding the agency's enforcement process. Anil Gaba provided superb computer programming support, Mark Dreyfus assisted in the data collection, and an anonymous referee offered several useful suggestions.