Understanding Regulatory Cost and Effectiveness: Evidence from India

Abstract

The authors compile a unique dataset on India’s controversial environmental clearance (EC) process, the system through which large investment projects receive government approval before breaking ground. In the mining sector, they find that EC may be an inefficient tool for environment protection: though the process is more stringent for mines with larger environmental risk, it gives preferential treatment to mines in politically aligned areas, and almost all mines ultimately receive clearance. This research was funded under the Private Enterprise Development in Low-Income Countries (PEDL) Programmde