SYSTEMATIC POLICY DEVELOPMENT TO ENSURE COMPLIANCE TO ENVIRONMENTAL-REGULATIONS

More efficient enforcement of environmental regulations would enhance environmental conditions around the globe by improving compliance to e xisting regulations and by allowing regulatory agencies to broaden the ir scope without increasing their budgets. This research analyzes comp ly-evade decisions by regulated firms in the context of their relation ships with environmental agencies, and determines which enforcement po licies effectively encourage voluntary compliance. More specifically, the enforcement conflict is modeled as a 2 x 2 non-cooperative game ca lled the Enforcement Dilemma. This game is examined as a simultaneous game, and also as a more realistic sequential game with asymmetric inf ormation. Then a supergame based on the Enforcement Dilemma is develop ed and analyzed. An effective long-term policy called the review strat egy is proposed to overcome the dilemma in this context.