Description:
We examine whether and how varying degrees of local community pressure influence regulated facilities’ degree of compliance with wastewater discharge limits within a formal regulatory environment that is characterized by its degree of enforcement fairness and explore two potential mechanisms through which this relationship operates. We use self-reported measures of local community pressure and enforcement fairness from a survey of chemical manufacturing facilities that are regulated under the U.S. Clean Water Act. Our empirical results demonstrate that not only does a higher degree of local community pressure lead to greater compliance, the efficacy of local community pressure is stronger under an enforcement regime that is perceived as less fair. Neither treatment technology adoption nor environmental auditing prove to be the mechanism through which facilities comply with water quality standards in response to local community pressure