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Monetary Penalties and Noncompliance with Environmental Laws: a Mediation Analysis

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Abstract

Studies that assess the impact of monetary penalties on environmental compliance have yielded mixed results. While some studies suggest fines deter future violations other studies find that fines do little to encourage compliance. This longitudinal study examines the impact of the dollar amount of fines on compliance with environmental laws among major facilities in the state of Michigan (n = 37). Results from a mediation analysis suggest that while noncompliance may slightly decrease immediately following a fine there are few changes to a firm’s long term compliance behavior. Furthermore, analyses of these data suggest that total fines levied prior to the most recent fine actually have a positive relationship with noncompliance. We suggest these results imply a decaying effect of deterrence that is perhaps connected to the organizational structure of the treadmill of production.

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Notes

  1. According to EPA ECHO data, in the state of Michigan, approximately 43 major active, operating facilities incurred their most recent monetary penalty between February 2014 and May 2016. As of November 2017, EPA ECHO data indicates that in the past five years, 91 facilities have received formal enforcement actions, and 73 (about 80.2%) of these facilities are currently in violation.

  2. According to the EPA, the terms “In Violation” “Significant Non Compliance” and “High Priority Violation” are:

    “Determinations made by the EPA or states when conducting inspections or reviewing facility self-reports. These determinations assist the government in tracking resolution of violations through the enforcement process and do not necessarily represent a final adjudication by a judicial or administrative body. In such cases, theses characterizations should be considered alleged violations,” (EPA, 2017b).

    As such, results from this study should be interpreted in proper context: the quarterly data do not necessarily represent a final adjudication. However, the ECHO data is the most comprehensive public database published by the EPA concerning environmental enforcement and compliance.

  3. Some researchers argue controlling for the influence of the independent variable is not required in this step of a mediation analysis (e.g., James & Brett, 1984). This argument has informed criminological mediation analyses (e.g., Miller, Jennings, Alvarez-Rivera, & Lanza-Kaduce, 2009). While we employ a strict interpretation of Baron and Kenny (Kenny, 2016), we did perform a sensitivity analysis, whereby we estimate Path b without controlling for the influence of Quarter 1 Noncompliance. Substantive results did not change (Beta = −.51, p < .001). Full results from this subsequent analysis are available upon request.

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Acknowledgements

Previous versions of this manuscript were presented at the American Society of Criminology 2016 Annual Meeting and the 2017 EcoJustice and Activism Conference. We are grateful for the participants and their comments.

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This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

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Authors and Affiliations

  1. Sociology, Anthropology, & Criminology Department, Eastern Michigan University, 712 Pray Harrold, Ypsilanti, MI, 48197, USA

    Kimberly L. Barrett

  2. Department of Criminology, University of South Florida, SOC107, Tampa, FL, 33620-8100, USA

    Michael J. Lynch

  3. Department of Sociology, Oklahoma State University, 431 Murray, Stillwater, OK, 74078, USA

    Michael A. Long

  4. Department of Social Sciences and Languages, Northumbria University, Room 217 Lipman Building, Newcastle, NE1 8ST, UK

    Paul B. Stretesky

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  1. Kimberly L. Barrett
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Correspondence to Kimberly L. Barrett.

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Barrett, K.L., Lynch, M.J., Long, M.A. et al. Monetary Penalties and Noncompliance with Environmental Laws: a Mediation Analysis. Am J Crim Just 43, 530–550 (2018). https://doi.org/10.1007/s12103-017-9428-0

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