Assessing a voluntary environmental initiative in the developing world: The Costa Rican Certification for Sustainable Tourism

The public policy literature has paid little attention to evaluating the ability of voluntary environmental programs to generate economic benefits for firms. Yet, given their voluntary nature, provision of economic benefits to firms is a necessary condition for these programs to become effective environmental policy instruments. Additionally, little is known about why firms operating in developing countries would participate in these initiatives.This paper provides some of the first cross-sectional empirical evidence about voluntary environmental programs established in developing countries. Specifically, the paper focuses on studying hotel participation in the Costa Rican Certification for Sustainable Tourism (CST program). The CST program is probably the first performance-based voluntary environmental program created by a developing country government. Results indicate that hotels with certified superior environmental performance show a positive relationship with differentiation advantages that yield price premiums. Participation in the CST program alone is not significantly related to higher prices and higher sales. The evidence also indicates that participation in the CST program was significantly related to government monitoring, trade association membership and hotels focus on green consumers.     

Voluntary Regulations and Innovation: The Case of ISO 14001

Governments enact environmental regulations to compel firms to internalize pollution externalities. Critics contend that regulations encourage technological lock‐ins and stifle innovation. Challenging this view, the Porter‐Linde hypothesis suggests that appropriately designed regulations can spur innovation because (1) pollution reflects resource waste; (2) regulations focus firms’ attention on waste; and (3) with regulation‐induced focus, firms are incentivized to innovate to reduce waste. This article explores the regulation–innovation linkage in the context of voluntary regulations. The authors focus on ISO 14001, the most widely adopted voluntary environmental program in the world. Examining a panel of 79 countries for the period 1996–2009, they find that country‐level ISO 14001 participation is a significant predictor of a country's environmental patent applications, a standard proxy for innovation activity. The policy implication is that public managers should consider voluntary regulation's second‐order effects on innovation, beyond their first‐order effects on pollution and regulatory compliance.     

Covenants with weak swords: ISO 14001 and facilities' environmental performance

Voluntary environmental programs are codes of progressive environmental conduct that firms pledge to adopt. This paper investigates whether ISO 14001, a voluntary program with a weak sword—a weak monitoring and sanctioning mechanism—can mitigate shirking and improve participants' environmental performance. Sponsored by the International Organization for Standardization (ISO), ISO 14001 is the most widely adopted voluntary environmental program in the world. Our analysis of over 3,000 facilities regulated as major sources under the U.S. Clean Air Act suggests that ISO 14001‐certified facilities reduce their pollution emissions more than non‐certified facilities. This result persists even after controlling for facilities' emission and regulatory compliance histories as well as addressing potential endogeneity issues between facilities' environmental performance and their decisions to join ISO 14001. © 2005 by the Association for Public Policy Analysis and Management     

How Voluntary Environmental Programs Reduce Pollution

This article investigates the mechanisms that voluntary environmental program (VEP) participants adopt to reduce pollution. The focus of this article is the 33/50 program, a VEP introduced by the U.S. Environmental Protection Agency in 1991 and discontinued in 1995. The program called for emissions reductions for 17 chemicals reported to the Toxics Release Inventory. Using a sample of approximately 12,000 plants, the relationship between 33/50 program participation and adoption of pollution reduction practices is studied for three time periods, 1991–1995 (program life), 1996–2004, and 2005–2013. These practices include source reduction activities (SRAs) and recycling, recovery, and treatment (RRTs). The major findings are that during the program's life, 33/50 participants showed increased adoption of SRAs and RRTs for both targeted and nontargeted chemicals. However, once the program ended, higher adoption rates persisted for RRTs only, with a shift in emphasis toward treatment over recycling and recovery.     

Export processing zones and corporate environmental performance in emerging economies: The case of the oil,gas, and chemical sectors of Trinidad and Tobago

Export processing zones (EPZs) are increasingly being established to promote economic growth in developing countries. However, they remain controversial and are often criticized for being associated with a “race to the bottom” characterized by the easing of labor and environmental standards. This paper investigates whether the decision to locate facilities inside these zones is associated with higher corporate environmental performance. Findings indicate that facilities operating in Trinidad and Tobago’s EPZs are more likely to show higher corporate environmental performance than those outside. Additionally, firms in state-managed zones appear to show higher corporate environmental performance than those located in privately managed zones. Enhanced institutional pressures from regulators, local communities, and fellow tenant firms may explain these differences. These results suggest that environmental policy makers and environmentalists can take advantage of already established EPZs to promote enclave enhanced institutional pressures associated with superior corporate environmental performance.

Trade-based adoption of voluntary environmental programs in the developing world: Racing to the top or stuck in the mud?

Scholars have consistently found that firms in developing countries adopt voluntary environmental programs (VEPs) in high numbers when their major trade partners are home to many VEP-certified firms. This reflects the following dynamic: Importers based in countries with many VEP-certified facilities demand similarly sustainable production processes from trade partners, and so exporting firms in partner countries adopt VEPs to signal their sustainable practices. Studies have identified characteristics of developing countries that make local exporting firms more likely to adopt VEPs as a signal; however, there has been little analysis as to the country-level characteristics that make importers more (or less) likely to demand VEPs from suppliers abroad, beyond having many VEP-certified firms themselves. This study considers this matter, theorizing that VEP diffusion only accompanies exporting to countries with high levels of income and education, as well as a high number of VEP-certified firms. Panel data analysis provides support for the theory, showing that developing countries only experience trade-based diffusion of ISO 14001 (a widely adopted VEP) through their exports to countries with high income and/or education levels. In contrast, exporting to countries that lack these characteristics creates no such diffusion, even where importing countries’ VEP certification levels are high. Instead, such trade produces a “stuck in the mud” effect, as developing countries’ certification levels stagnate even as those of their import partners rise.     

Voluntary environmental agreements in developing countries: the Colombian experience

Voluntary agreements (VAs) negotiated between environmental regulators and polluters are increasingly popular in developing countries. According to proponents, they can sidestep weak institutions and other pervasive barriers to conventional mandatory regulation in such countries. Yet little is known about the drivers of their use and their effectiveness in poor countries. The considerable literature on voluntary initiatives in industrialized countries, where both VAs and socioeconomic conditions differ, may not apply. Using a conceptual framework drawn from the economics literature, we examine four prominent VAs in Colombia, a global leader in the use of this policy. We find that the main motive for using VAs has been to build capacity needed for broader environmental regulatory reform and that partly as a result, VAs’ additional effect on environmental performance has been limited. These findings contrast with those from industrialized country studies, which typically conclude VAs are used as a low-cost substitute for impending mandatory regulation and have few benefits because of weak regulatory pressure. Our findings suggest that in developing countries, VAs may be best suited to capacity building, not environmental management per se.     

Which Types of Environmental Management Systems Are Related to Greater Environmental Improvements?

While there is little empirical evidence to demonstrate which types of environmental management systems (EMSs) are associated with greater environmental improvements, governments worldwide are encouraging facilities to adopt them. This research compares the environmental performance of facilities that adopt ISO 14001–certified EMSs, complete (noncertified) EMSs, and incomplete EMSs across multiple environmental media. The authors analyze these relationships for manufacturing facilities in seven countries using a two‐stage model to control for selection bias. Findings indicate that the adoption of all types of EMSs is related to improved environmental performance in an international setting. However, ISO 14001–certified EMSs are associated with environmental improvements to a broader array of environmental media. These findings offer important implications about which types of EMSs have greater promise as voluntary environmental governance tools.     

Participation rationales,regulatory enforcement,and compliance motivations in a voluntary program context

This article extends the study of regulatory compliance motivations from “traditional” regulatory settings to a government-sponsored voluntary one. We argue that the rationale(s) which motivate participants to engage a voluntary program likely shape which motivations drive them toward (or away from) program compliance. Our study examines the possible influence of program participation rationales alongside that of regulatory agents' enforcement styles and strategies. Leveraging a national survey of certified United States Department of Agriculture organic producers, we find that the more a producer pursues organic certification to increase profits, the more likely they are to report deterrent fears as an important compliance motivation. In contrast, the more a producer becomes certified to support the organic movement, the more heavily they weigh a personal sense of duty to comply. We discuss the implications of these, and other, study findings for compliance motivations theory and voluntary program integrity.     

Environmental equity and public participation

The principles and practice of public participation can serve to promote environmental equity for disadvantaged social groups. The effectiveness of such practice in preventing or reducing environmental inequity depends upon the use of participation methodology which caters to the cultural and social needs of such groups. These methods need to provide appropriate forms of information, suitable venues for participation, and access to expertise and education which enable the public to understand policy issues and formulate preferences. The extent to which public preferences are incorporated in policy decisions determines the worth of public participation programs in promoting environmental equity.     

Effects of Exchange Rate Regime on IMF Program Participation

This article investigates the effect of a domestic policy choice, the exchange rate regime, on countries’ interaction with an international institution, their participation in International Monetary Fund (IMF) lending agreements. I hypothesize that the effect of the level of international reserves on a country's probability of participation in an IMF program depends on the exchange rate regime. A low level of international reserves threatens unfavorable economic and political outcomes only in countries that maintain a fixed exchange rate regime. The level of reserves may thus be a significant determinant of participation in IMF programs only for countries that maintain a fixed exchange rate regime. I use a dynamic univariate probit model of IMF program participation to assess empirically the effect of reserves in countries that maintain fixed, intermediate, and floating exchange rate regimes. The empirical results support my hypothesis: reserves have a significant effect only in countries that maintain a fixed exchange rate.     

Participation in voluntary individual savings accounts: an analysis of IRAs, 401(k)s, and the TSP

New voluntary individual savings accounts have been proposed by some as a part of, or in addition to, Social Security. The success of these proposals would depend greatly on how many workers participate. This paper compares participation rates in three existing voluntary individual account-type plans--Individual Retirement Accounts (IRAs), 401(k)s, and the federal Thrift Savings Plan (TSP)--to clarify expectations about who might participate in a voluntary individual account system. It finds that participants in IRAs, 401(k)s, and the TSP tend to be disproportionately male, higher earners, older, full-time workers, and either white or nonblack minorities compared with the population at large. Differences in earnings explain much of the difference between participation rates of men and women, however, but less of the difference between participation rates of workers of different races. Whether participation in a new system of voluntary individual accounts would resemble participation in IRAs, 401(k)s, or the TSP would depend on a number of factors. For instance, the population covered by 401(k)s and the TSP is much smaller than that covered by Social Security. Average earnings are also higher among 401(k) and TSP participants than for workers covered by Social Security, which, based on these findings, suggests that participation rates could be lower in a universal system. Participation would also depend on many other factors, however, such as the extent of matching contributions or other financial incentives, the investment options available, and the amount of education provided to potential participants.     

From norms to programs: The United Nations Global Compact and global governance

Norms shape policy when they get translated into concrete programs. What if a widely shared norm gets translated into a weak program? How might this influence the program's legitimacy? We examine these issues in the context of the United Nations Global Compact, a voluntary program that embodies the widely shared norm of corporate responsibility. While both international intergovernmental organization (IGO) and international non‐governmental organization (INGO) networks support this norm, they differ on the adequacy of the Compact's program design. We explore how this tension affects the diffusion of the Compact across countries, which vary in their levels of embeddedness in IGO and INGO networks. Our findings suggest that embeddedness in IGO networks encourages adoption, while embeddedness in INGO networks discourages it. Our analysis provides important lessons for sponsors of voluntary governance mechanisms. Widespread support for a norm does not automatically ensure support for a program that claims to embody it.     

Are Reemployment Services Effective? Experimental Evidence from the Great Recession

We examine an experimental‐design reemployment program implemented in Nevada during the Great Recession that required Unemployment Insurance (UI) recipients to: (1) undergo an eligibility review to confirm they were qualified for benefits and actively searching for work and, if deemed eligible, (2) receive job‐counseling services. Our results show that the program expedited participant exit from UI, produced UI savings that exceeded program costs, and improved participant employment outcomes. Analyses of program effects on the UI exit likelihood show that the program's effects are partly associated with increased participant exit up through the time when program activities were scheduled, reflecting voluntary exit of participants from UI to avoid program activities and disqualifications of participants who failed to meet eligibility requirements. In addition, the program induced substantial participant exit from UI in the period after participants fulfilled requirements and their interactions with the program had ended, suggesting that the job‐counseling services offered by the program may have helped participants to conduct more effective job searches. Our findings provide evidence that reemployment programs that combine an eligibility review with mandatory participation in job‐search services can be effective during recessions.     

Corporations at a crossroads: How multilevel governance interactions shape participation and effort in private governance regimes

This article argues that the interactions between firm agency in corporate management and the multilevel governance structures in which firms operate condition firms' participation and effort in private governance regimes. Empirically, I examine the Fortune Global 500 firms' decisions about participation and the extent of participation in the Carbon Disclosure Project during 2011–2015. Given firms' strategic considerations, the efficacy of corporate management structures and practices is conditioned by domestic regulatory and global regime contexts, and this efficacy varies across developed and developing countries. In developed countries, corporate, domestic, and global governance positively reinforce each other as drivers of private regulation on climate change. These governance levels are complements not substitutes. By contrast, the main drivers of participation and effort in developing countries are corporate management structures and practices, the stringency of domestic regulatory institutions, and their interactions. This article's results are robust to alternative specifications, including an alternative modeling approach.     

Does Type of Education Affect Political Participation? Results from a Panel Survey of Swedish Adolescents

In several countries it is apparent that individuals with academic gymnasium (upper‐secondary) education show significantly higher levels of political participation than individuals with vocational education. However, previous research on this issue draws exclusively on one‐shot cross‐sectional data. This article utilizes a Swedish panel survey to gauge whether there is a direct causal link between type of education and political participation. Results demonstrate that differences in political participation are already present when students enter different types of education. The analyses show no significant effects of education; instead results support the education‐as‐a‐proxy view: pre‐adult factors predict political participation as well as educational choice.     

Voluntary environmental programs: A comparative perspective

Voluntary environmental programs (VEPs) are institutions for inducing firms to produce environmental goods beyond legal requirements. A comparative perspective on VEPs shows how incentives to sponsor and participate in VEPs vary across countries in ways that reveal their potential and limitations. Our brief survey examines conditions under which VEPs emerge, attract participants, and improve participants' environmental performance. We focus on the costs and bene‐fits for actors seeking to supply (or sponsor) these governance mechanisms as well as the costs and benefits for firms who are considering joining VEPs and adhering to their program obligations. © 2011 by the Association for Public Policy Analysis and Management.     

Spillover Effects of Voluntary Environmental Programs on Greenhouse Gas Emissions: Lessons from Mexico

We compare the environmental performance of voluntary environmental programs (VEPs) with different attributes. Using club theory, we argue that the differential performance of VEPs is due in part to their specific design attributes that will either enhance or diminish their ability to improve both targeted and untargeted environmental impacts. We analyze two VEPs in Mexico, the global standard ISO 14001 and the local standard Clean Industry. These two VEPs differ in the stringency of the standards and in their ability to sanction noncompliant facilities. These differences ensure that firms adopting the local standard are less likely to shirk their responsibilities and enhance potential spillover effects on untargeted environmental emissions. Our empirical results support our hypotheses and show that the local Clean Industry program is more effective in improving both targeted (toxic emissions) and untargeted environmental impacts (greenhouse gas emissions).     

The regulatory style of environmental governance in China: the case of EIA regulation in Shanghai*

The body of literature that examines how institutional contexts affect environmental governance in advanced industrial countries finds that style of environmental regulation is country‐specific. In the pluralist form of democracy like the United States, environmental policy formulation involves bargaining and compromises among interest groups and regulation enforcement through relatively formal and legalistic means. In the corporatist form of democracy like Sweden and Great Britain, in contrast, environmental policies are more accommodating to divergent societal interests and tend to be less formal in their enforcement. These variations in regulatory style have been attributed to differences in basic constitutional structures, regime types and cultures. How do institutional contexts affect the style of environmental regulation in China, which is both a non‐democratic and developing country? This article examines China's regulatory style by focusing on environmental impact assessment (EIA) regulation in Shanghai. The Shanghai EIA system is analyzed in terms of policy ideology, policy content, regulatory process, public participation and policy consequences. It is shown that China's being a single‐party regime with a ‘rule of persons’ tradition has heavily shaped its environmental governance. Based on Shanghai experience, China's style can be characterized as formal in requirement, agency‐dominated in the regulatory process, legalistic in enforcement, and informal politics as the substance of regulation. Copyright © 2000 John Wiley & Sons, Ltd.     

Schools of democracy? Disentangling the relationship between civic participation and political action in 17 European countries

Since Tocqueville's seminal writings, voluntary associations have been proclaimed to be schools of democracy. According to this claim, which regained popularity during the 1990s, involvement in voluntary associations stimulates political action. By participating in these associations, members are socialised to become politically active. Supposedly, having face‐to‐face contact with other members induces civic mindedness – the propensity to think and care more about the wider world. Participating in shared activities, organising meetings and events, and cooperating with other members are claimed to induce civic skills and political efficacy. Over the years, many authors have elaborated on these ideas. This article offers a systematic examination of the neo‐Tocquevillian approach, putting the theoretical ideas to an empirical test. It offers a critical overview of the literature on the beneficial role of voluntary associations and dissects it into five testable claims. Subsequently, these claims are tested by cross‐sectional, hierarchical analyses of 17 European countries. The authors conclude that the neo‐Tocquevillian theory faces serious lack of empirical support. In line with the expectations, they find a strong, positive correlation between associational involvement and political action. Moreover, this correlation is positive in all countries under study. However, more informative hypotheses on this correlation are falsified. First, the correlation is stronger for interest and activist organisations than for leisure organisations. Second, passive (or ‘checkbook’) members show much higher levels of political action than non‐involved, whereas the additional effects of active participation are marginal. Third, the correlation between associational involvement and political action is not explained by civic skills and civic mindedness. In sum, the authors find no evidence for a direct, causal relation between associational involvement and political action. The socialisation mechanism plays a marginal role at best. Rather, this article's findings imply that selection effects account for a large part of the correlation between associational involvement and political action. The conclusion reached therefore is that voluntary associations are not the schools of democracy they are proclaimed to be, but rather pools of democracy.