Self-Reporting and Private Enforcement in Environmental Regulation

Self-reporting of compliance status has become a common feature in the enforcement of environmental regulation. In this paper, I generalize existing models of enforcement with self-reporting to include the possibility of private enforcement of regulation through citizen suits. This allows me to identify an additional argument for the efficiency of self-reporting: it can increase the likelihood of a successful suit and thus facilitate private enforcement of regulation. Specifically, if self-reporting sufficiently increases the expected penalty for losing a citizen suit, if the costs of private enforcement are low, and if inspection costs are high enough relative to enforcement costs, self-reporting lowers expected regulatory and social costs by allowing the regulator to rely on private enforcement and decrease his enforcement efforts.