Effectiveness of enforcement systems for environmental regulations: comparison of Japanese and North American systems

Many theoretical and empirical studies have focused on the effectiveness of environmental regulations, especially for direct discharges by firms. While most of the study focus on the enforcement systems in United States and Canada, there is very little theoretical study on effectiveness of enforcement of environmental regulations in Japan. It is, however, also recognized that Japan had been so successful in its policies to reduce its pollution level dramatically in short term during the second half of its industrializing era. In this study, the Japanese enforcement system of environmental regulations is modeled and analyzed theoretically in the light of comparison with the North American system. The study clarifies how the Japanese enforcement system leads to the incentives of regulatory compliance by firms. The results are compared with the enforcement mechanism and its effectiveness obtained in Kilgour et al. (1992) for the North American systems