Informal Regulation of Industrial Pollution in Developing Countries: Evidence from Indonesia
Posted: 27 Oct 1999
When formal regulation is weak or absent, communities often use other channels to induce pollution abatement by local factories in a process of "informal regulation." The resulting "pollution equilibrium" reflects the relative bargaining power of the community and the plant. This note uses Indonesian data from 1989-90 on plant-level organic water pollution to test the informal regulation hypothesis.
JEL Classification: Q25, Q20, O13
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