Effectiveness of policy against illegal disposal of waste

Our objective is to analyze the effectiveness, against the illegal disposal of waste, of a licensing system that has been introduced in a waste management policy. We theoretically find enforcement leverage in the licensing system, and then examine the theoretical result empirically. The results suggest that extending liability to disposers, which forms the basis of the enforcement leverage, deters illegal disposal more effectively than increasing penalties for illegal disposal. We also obtain evidence of transboundary movement of illegal disposal, and find how the court determines penalties for illegal disposal.