The authors start from the premise that governments act as agents of the public in regulating pollution, using the instruments at their disposal. But when formal regulatory mechanisms are absent or ineffective, communities will seek other means of translating their preferences into reality....

Several previous studies have asked whether environmental controls imposed in the industrial economies are diverting investments in pollution-intensive activities off-shore. Broadly, these studies conclude that direct investment does not appear to be stimulated by such regulations, partly...

Using new survey evidence, the authors analyze the effects of regulation, plant-level management policies, and plant and firm characteristics on environmental performance in Mexican factories. They focus especially on management policies: the degree of effort to improve environmental performance...