Association for Public Policy Analysis & Management

Environmental problems often cut across political and administrative boundaries. Yet, effective policy responses to pollution necessitate cooperation and coordinated effort, both of which may erode in a fragmented policy domain. When such fragmentation occurs, government officials face incentives to free ride on the relative contributions of others and increased costs of coordinating strategies. The result is a weaker and more uneven policy response, resulting in potential risks to human health and the environment.

In this paper, we argue that the imposition of administrative boundaries on a policy domain has the potential to exacerbate cooperation and coordination dilemmas conditional on the extent to which these boundaries 1) dissect natural environmental borders or 2) introduce heterophily.

Regarding natural borders, the incentive to free ride on another governmental unit’s effort is likely correlated with the extent to which an environmental resource is splintered by administrative boundaries. For example, many of the more than 2000 watersheds in the United States are dissected by state regional administrative boundaries. Regional officers who share responsibility over watersheds with other regions face not only incentive to free ride, but also challenges in coordinating enforcement strategies. As a result, we ought to observe lower levels of regulatory activity toward firms located in shared watersheds. However, these types of coordination dilemmas should be easier to resolve when decision-making authority is centralized within the agency. Therefore, when there is centralized decision-making authority, we expect the regulatory effects of dissected watershed boundaries to be attenuated.

Second, administrative boundaries shape the diversity of political and demographic features of the policy domain. Recent work suggests that policy domain heterophily (i.e., the extent to which stakeholders are different from each other) decreases the likelihood that stakeholders will form social network ties with each other. Heterophilic ties decrease the prospects of policy collaboration by raising the transaction costs associated with collective and coordinated action. To the extent that two or more regions share implementation authority over a given watershed, their ability to successfully develop coordinated responses to watershed pollution thus should be conditioned by regional network heterophily.

We test our expectations with a newly-constructed dataset of regional offices created by U.S. states to implement the Clean Water Act (CWA). For each regional office, we spatially define its jurisdiction and overlap with watersheds, and collect data on its political and demographic characteristics to measure regional network heterophily. We have also compiled data on where within each state agency decision-making authority rests. Then, using regression analysis we investigate the degree to which higher levels of fragmentation of watersheds results in less regulatory effort from regional agents, and whether this is attenuated by centralized decision-making authority and less heterophily. The subjects of the analysis are 6,500 major water pollution sources regulated under the CWA.

This paper contributes to both theoretical and empirical literatures on institutions, policy coordination, and environmental politics. In addition, the research has significant implications for environmental governance by examining the effects of fragmented institutions on regulatory effort, and ultimately risks to public health and the environment.