The aim of this paper is to test the role of the regulator in combating environmental infractions in Brazil. The main explanatory variables are the values of fines imposed on the state (specific effect) and on surrounding states (spillover effect), which reflect the reputation of the regulator. This paper also examines the complementary role of private agents on monitoring and application of informal sanctions. The data source comprises, at state level, the amount of notices of violation recorded by IBAMA and the related fines for the years 2000 to 2011. The results obtained by the method of Fixed Effects demonstrate that an increase on the values of fines imposed on a state and its neighbors generates a reduction in the number of notices of infraction for the years following the imposition of a fine.
environmental infractions; fines; formal regulation; spillover effects; panel data
