Comparing Japanese and American Industrial Effluent Control: A Case Study of the Consequences of Contrasting Regulatory Styles

Based on the experiences of a multinational corporation with contrasting effluent control in the United States and Japan, this article suggests that American regulations are more costly to comply with, but do not necessarily sustain superior effectiveness to the Japanese counterparts. The informal character of Japanese regulations and cooperative interactions between industry and government appear to encourage the firm to implement measures that overcomply with the current laws, and may reduce the marginal cost of pollution control. On the other hand, the greater legalism and contentious process associated with American regulations dampen the firm's incentives to overcomply with permits requirements and to adopt certain environmental management practices that the firm has employed in its Japanese factories.