Bureaucratic response to performance information: how mandatory information disclosure affects environmental inspections

Abstract

Information disclosure has become a ubiquitous component of contemporary governance. This study examines how disclosure of information about the performance of regulated entities, which also implicates the performance of relevant government agencies, affects bureaucratic behaviors. In the context of the Clean Air Act (CAA)—the primary law that regulates air pollution in the United States—this study shows that regulators significantly increased CAA regulatory inspections on facilities that started to disclose relevant performance information to the public following the requirements of the Toxics Release Inventory (TRI), which is a major environmental information disclosure program in the United States. Additional analyses suggest the increase was because of the disclosure providing new information to regulators instead of mobilizing citizen actions. The findings suggest that performance information about regulated entities can alleviate information asymmetry between bureaucrats and regulated entities and increase the accountability of regulated entities as well as relevant government agencies.