Is a nudge enough? Evidence from environmental compliance in Chile's industrial wastewater regulation

Abstract

This study evaluates whether automated, customized notifications can improve environmental adherence at scale. Using a census panel from Chile's environmental regulator (SMA) with monthly compliance statuses from facilities' monitoring reports, we analyze a national deployment of notifications to all industrial wastewater dischargers. A regression discontinuity design at the rollout demonstrates null effects on substantive environmental obligations but significant improvements in administrative compliance: reporting timeliness increased between 17 % and 24.5 % with respect to baseline levels while completeness jumped between 53.7 % and 66 %. Post-rollout dynamics show persistent gains in administrative compliance and a delayed, not causally identified, rise in compliance with flow-discharge limits. Transition-hazard estimates show higher monthly exit from and lower entry into non-compliance for administrative duties, with increased exits from non-compliance for flow-discharge limits. Subgroup analyses indicate that facilities starting from lower pre-intervention compliance improve more on that same obligation and we find attenuated effects where facilities had recent regulatory attention. Taken together, our results are more consistent with behavioral adjustment than with strategic reporting, though manipulation cannot be ruled out. The presented evidence highlights the promise of technology-driven nudges to address informational barriers and enhance regulatory responses in resource-constrained settings. Our contributions are threefold: (1) quasi-experimental evidence of immediate notification effectiveness; (2) integrated dynamics and transition analyses that shed light on mechanisms of response; and (3) analyses of distributional effects.