Delegation of environmental regulation and perceived corruption in South Africa

Sammanfattning

I study the drivers of a reduction in the discretionary power of environmental inspectors and the impact that such reduction has on firms' perceptions. I examine the transition from the Air Pollution Protection Act of 1965 to the Air Quality Act of 2005 (AQA), a change from full to partial delegation of regulation in South Africa. By constructing a principal-agent model, I propose a theoretical explanation for why a society would restrict environmental inspectors' discretionary power. I then use my theoretical model to discuss the air quality regulation transition in South Africa. I suggest that the transition might have occurred because of increases in inspectors' rent-seeking motivation and capacity of appropriating rents after the end of Apartheid. Using microdata, I run difference-in-differences models in a two-period panel with 191 South African firms to show that the implementation of the AQA decreases affected firms' perceived corruption, but does not change perceptions on obtaining licences and on the functioning of courts. My work indicates that national governments in developing countries should consider the characteristics of the agents who are implementing regulation, and the system they are embedded in, when designing environmental regulation.

Nyckelord

Delegation of regulation; Perceived corruption; Developing countries; South Africa

Publicerad i

Resource and Energy Economics
2024, volym: 79-80, artikelnummer: 101462
Utgivare: ELSEVIER

SLU författare

• Guimares Naso, Pedro

  • Institutionen för ekonomi, Sveriges lantbruksuniversitet
    

Globala målen (SDG)

SDG16 Fredliga och inkluderande samhällen
SDG17 Genomförande och globalt partnerskap

UKÄ forskningsämne

Studier av offentlig förvaltning
Miljövetenskap
Nationalekonomi

Publikationens identifierare

• DOI: https://doi.org/10.1016/j.reseneeco.2024.101462

Permanent länk till denna sida (URI)

https://res.slu.se/id/publ/133126