Cross-Border Environmental Management and the Informal Sector: The Ciudad Juarez Brickmakers' Project

The considerable difficulties associated with cross-border environmental management are compounded when polluters are unlicensed micro-enterprises such as auto repair shops and traditional brick kilns; such "informal sector" firms are virtually impossible to regulate in the conventional manner. This paper describes an example of an innovative and promising approach to the problem: the Cd. Juarez Brickmakers' Project, a private-sector-led, binational initiative aimed at abating highly polluting emissions from Cd. Juarez's approximately 350 informal brick kilns. We draw three lessons from the Project's history. First, private-sector-led cross-border initiatives can work -- indeed they may be more effective than public sector initiatives -- but they require strong public sector support. Second, necessary conditions for effective environmental management in the informal sector include enlisting the cooperation of local unions and political organizations, relying upon peer monitoring among informal firms, and providing inducements to offset compliance costs. Ineffective strategies include promoting too-advanced and therefore inappropriate technologies and intervening in informal markets. And finally, the history of the Brickmakers' Project suggests that, in volatile developing economies, even well designed voluntary market-based environmental initiatives in the informal sector are bound to be fragile.

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Working or Discussion Paper
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JEL Codes:
O17; O54; L61; Q25; Q28
Series Statement:
Discussion Paper 96-22

 Record created 2017-04-01, last modified 2018-01-22

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