Certainty of Punishment versus Severity of Punishment: Enforcement of Environmental Protection Laws

摘要

According to the standard en-forcement model, key deterrence components are punishment certainty and severity. Theory predicts the relative efficacy of certainty ver-sus severity, but empirical and experimental evidence are mixed. Our study is the first to systematically compare the effects of certainty and severity in the environmental protection context. Our empirics examine wastewater discharged by chemical manufacturing fa-cilities permitted under the Clean Water Act. We find that when enforcement certainty and severity are high, both components effectively deter pollution, with certainty being more effective. In contrast, certainty and severity increases prove counterproductive when cer-tainty and severity are low. (JEL Q53)