Does Eco-Certification Boost Regulatory Compliance in Developing Countries? ISO 14001 in Mexico

Resources for the Future Discussion Paper No. 11-39

31 Pages Posted: 2 Jan 2012

See all articles by Allen Blackman

Allen Blackman

Inter-American Development Bank (IDB)

Date Written: August 23, 2011

Abstract

Private sector initiatives certifying that producers of goods and services adhere to defined environmental process standards are increasingly popular worldwide. According to proponents, they can circumvent chronic barriers to effective public sector environmental regulation in developing countries. But eco-certification programs will have limited effects on producers’ environmental performance if, as one would expect, they select for those already meeting certification standards. Rigorous evaluations of the environmental effects of eco-certification in developing countries that control for selection bias are rare. We use plant-level data on more than 80,000 Mexican facilities to determine whether ISO 14001 series certification of environmental management systems boosts regulatory compliance. We use propensity score matching to control for nonrandom selection into the program. We find that plants recently fined by environmental regulators were more likely to be certified, all other things equal, but that certified plants were subsequently fined just as often as similar uncertified plants. These results suggest that in Mexico, the ISO 14001 program attracts dirty plants under pressure from regulators — not just relatively clean ones — but does not have a large, lasting impact on their regulatory compliance.

Keywords: voluntary environmental regulation, duration analysis, propensity score matching, Mexico

JEL Classification: Q56, Q58, O13, O54, C41

Suggested Citation

Blackman, Allen, Does Eco-Certification Boost Regulatory Compliance in Developing Countries? ISO 14001 in Mexico (August 23, 2011). Resources for the Future Discussion Paper No. 11-39. Available at SSRN: https://ssrn.com/abstract=1978520 or http://dx.doi.org/10.2139/ssrn.1978520

Allen Blackman (Contact Author)

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

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