An empirical study of federal law versus local environmental enforcement

A potential problem with local enforcement of national legislation is the varying degrees of implementation that the decentralized structure may create. To study the severity of this problem, induced by the mismatch of local and national incentives, I look at the enforcement of the Swedish Environmental Code which is enforced at the local level. I measure enforcement in terms of environmental fines issued in each of Sweden's 290 municipalities. I argue that the Green Party values the tradeoff between business friendliness and environmental concerns differently from other parties. Using both a difference-in-differences approach and IV, I find that municipalities with the Green Party in the ruling coalition issue more fines than other municipalities. This is problematic from an efficiency and equality perspective. The result suggests that politicians do not only affect environmental policy, but also that for a given policy, they can affect the outcome through implementation and enforcement. (C) 2015 Elsevier Inc. All rights reserved.