Speaker
Description
Monitoring and punishment are common tools for increasing the cost of non-
compliance. In developing country contexts, however, these tools are often ineffective
or inefficient. We investigate an alternative approach: Subsidies that reduce the cost
of compliance. We conduct a randomized controlled trial with 799 boat owners at
Lake Victoria, Kenya and Tanzania, clustered at the level of landing sites. We
offer compliant fishing net panels for sale and investigate the effect of a susidy on
the purchase and use of non-compliant panels. We test the impact of the subsidy
under a regime with enforcement (Tanzania) and without enforcement (Kenya).
We find that a discount of 10 USD on compliant panels crowds out an average of
1.5 non-compliant panels in the absence of enforcement, which is higher than in the
presence of enforcement (half a panel). When offered a second time (3 months later)
the subsidy treatment significantly increases the likelihood of purchase, suggesting
that subsidies can lead to sustained reductions in non-compliance and this effect is
particularly pronounced under enforcement
| Keyword | Environmental Economics and Sustainability |
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