The Effect of Inspector Group Size and Familiarity on Enforcement and Deterrence

The Effect of Inspector Group Size and Familiarity on Enforcement and Deterrence The paper provides new insights into the productivity of teams and the relationship between the inspector and the inspected party. Exploiting exogenous variation in the number of inspectors that are sent to offshore oil and gas platforms in the Gulf of Mexico, we find that adding an inspector does not simply result in more observed violations – it increases the severity of sanctions imposed on those violations that are detected. We also find that inspectors who are more familiar with the offender impose less severe sanctions. We only find weak evidence that increasing sanction severity deters incidents such as oil spills. JEL Classification: Q58, K42