[caption id=”attachment_148800″ align=”aligncenter” width=”1024″] (Mark Sterkell/Odessa American via AP)
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Government regulation is supposed to protect people and the environment, but government agencies violate laws more often and are less likely to be penalized for it, research suggests.
In “When Governments Regulate Governments,” David Konisky of Indiana University and Manuel Teodoro of Texas A&M University look at compliance with the U.S. Clean Air Act and the Safe Drinking Water Act.
It turns out that private entities are more likely to comply with environmental laws and regulations. Bad press, fines, fees, and other enforcement mechanisms incentivize them to follow the law.
Government agencies, however, don’t seek to maximize profits (and tend not to have any), so they have “greater incentives than profit-maximizing firms to shirk regulation” or use political connections to avoid penalties.
Intuitively, it makes sense. If a company harms someone or pollutes the environment, private individuals who were harmed can sue a company, or the government can force them to pay fines. The bad publicity and harm to business encourages the company to comply with the law.
A government agency, however, isn’t focused on earning a profit. Those in charge of the agency have other government connections. Bad press coverage can harm it, but the agency will recover.
Freedom Industries, the company responsible for a chemical leak that polluted the Elk River in Charleston, West Virginia, went bankrupt as a result. The Environmental Protection Agency’s pollution spill in the Animas River of Colorado and New Mexico, however, was treated as a “mistake.”
Without a profit motive to force compliance, environmental regulation and enforcement for government agencies is much more difficult.
To restrict pollution and harm by governments, regulation will have to be more creative and nuanced than the treatment of private entities.
