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Precursors of environmental compliance in a transitional economy: an empirical investigation of monitoring and enforcement in Chile

Published online by Cambridge University Press:  30 June 2025

Adolfo Uribe Open the ORCID record for Adolfo Uribe [Opens in a new window]  and
Carlos Chávez
Adolfo Uribe*
Affiliation:
Laboratory for Energy Systems Analysis, PSI Center for Energy and Environmental Sciences, Paul Scherrer Institut (PSI), Villigen, Switzerland
Carlos Chávez
Affiliation:
Escuela de Ingeniería Comercial, Universidad de Talca Facultad de Economía y Negocios, Talca, Chile Interdisciplinary Center for Aquaculture Research (INCAR), Concepción, Chile
*
Corresponding author: Adolfo Uribe; Email: adolfo.uribe-poblete@psi.ch
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Abstract

We study monitoring and enforcement for environmental compliance in the context of a transitional economy. We estimate the factors correlated with inspections carried out by the Chilean Superintendence of Environment, the imposition of fines to detected violators and the compliance behaviour of regulated facilities. The analysis considers 6,670 facilities from different economic sectors between 2013 and 2019. We find evidence of targeted monitoring and enforcement actions based on past facilities’ behaviour and individual specific characteristics. The size of the implemented fines on detected violators correlates positively with the severity and recurrence of the violation and larger fines are imposed on facilities in the energy and mining sector. We also find that the imposition of fines is transmitted as a spillover effect on the compliance behaviour of facilities sharing the same firm owner. We discuss the policy implications for improving monitoring and enforcement strategies under budget constraints.

Keywords

enforcementenvironmental compliancefinesmonitoringspillover effects

JEL classification

Q58: Government Policy K42: Illegal Behavior and the Enforcement of Law K32: Energy, Environmental, Health, and Safety Law Q53: Air Pollution • Water Pollution • Noise • Hazardous Waste • Solid Waste • Recycling

Information

Type
Research Article
Information
Environment and Development Economics , First View , pp. 1 - 27
Copyright
© The Author(s), 2025. Published by Cambridge University Press.

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