Monitoring and enforcement of environmental regulations

Relying on a small natural field experiment conducted by the Norwegian Environmental Protection Agency, I estimate effects of three fundamental elements of most monitoring and enforcement practices: self-reporting, audit frequency and specific deterrence. I find evidence of under-reporting of violations in firms' self-audits, as more violations are detected in on-site audits than in self-audits. Announcing the increased audit frequency has no effect on firms' compliance, but an audit raises subsequent compliance substantially.