Academic journal article Review of Social Economy

Ethnic Heterogeneity and the Enforcement of Environmental Regulation

Academic journal article Review of Social Economy

Ethnic Heterogeneity and the Enforcement of Environmental Regulation

Article excerpt

Abstract We examine the relationship between the administrative enforcement of environmental regulation, ethnic heterogeneity, and other community characteristics in New Jersey and New York. We find that the percentage of non-white population in a community is positively related with administrative penalties imposed on violators. However, penalties are lower in more ethnically diverse communities. This result may be due to the fact that these communities are less likely to coordinate to create solidarity across ethnic groups and demand stronger enforcement.

Keywords: ethnic heterogeneity, environmental justice, enforcement, regulation

INTRODUCTION

Although studies of the distribution of environmental risks routinely include the percentage of minorities in a community to examine whether nonwhite residents suffer a disproportionate burden of environmental hazards, ethnic heterogeneity can also have an additional important impact on the level of environmental protection. There is empirical evidence that ethnic diversity influences economic outcomes and, in particular, the provision of public goods. For example, Alesina et al. (1999) show that spending in non-excludable goods decreases with ethnic heterogeneity; Alesina and La Ferrara (2000) find that a community's ethnic heterogeneity influences individuals' incentives to belong to voluntary organizations while Vigdor (2004) shows that racial heterogeneity reduces the propensity to engage in collective action.

According to Alesina and La Ferrara (2005), ethnic diversity influences the provision of public goods when individual preferences include a taste for homogeneity. (1) Specifically, individuals who prefer homogeneity receive disutility from a public good if the use of the good requires sharing and contacts across different ethnic groups. Thus, if ethnic diversity reduces the incentives for collective action and the likelihood that a community can foment solidarity and protest against environmental violations, then regulators seeking to maximize their political power would impose larger penalties in ethnically homogenous communities than in heterogeneous communities. In this paper we find evidence that ethnic heterogeneity reduces the enforcement of environmental laws. Using zip-code level data from New Jersey and New York, we examine administrative penalties assessed by state regulators and find that violators receive smaller penalties in communities that are more diverse ethnically although penalties are higher in zip codes where more residents are non-white.

In the vast area of environmental justice there are relatively few studies analyzing the enforcement of environmental regulation. Among these studies, most papers investigate the decisions by the US Environmental Protection Agency (EPA) to treat abandoned hazardous waste sites (the Superfund program). Sigman (2001) finds that Superfund cleanup priorities are more influenced by private interests than by the harm posed by the sites. Similarly, Viscusi and Hamilton (1999) find that a community's voter turnout increases remediation funds and cleanup targets. Zimmerman (1993) and Lavelle and Coyle (1992) document that in areas with a larger percentage of minorities, cleanup progress is slower than in other communities. However, Hird (1994) and Gupta et al. (1996) do not find that income or percentage of minorities influence Superfund cleanup decisions. Research has almost exclusively focused on Superfund because of the controversial nature of the program, its size, and the fact that there are comparatively objective criteria under which the EPA is presumed to undertake cleanup priorities.

Gray and Shadbegian (2004) have extended the analysis of regulatory stringency to air and water enforcement for pulp and paper mills. The authors consider both direct measures of regulatory stringency (number of inspections and enforcement actions) and indirect measures (amount of air and water pollution). …

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