ABSTRACT
A s discussed in Chapter 1, weak institutions, limited political support, and a host of other constraints hamper environmental management in developing countries, and these limitations are magnified when polluters are small-scale and informal. Recently, clean technologies—new technologies that mitigate environmental impacts without significantly raising production costs—have received considerable attention as a means of surmounting such problems. The hope is that firms will adopt such technologies voluntarily, or at least with minimal prodding, easing the burden on regulatory authorities. General endorsements of clean technologies are contained in both the seminal Brundtland Commission Report to the U.N. (World Commission on Environment and Development 1987) and the equally influential 1992 World Bank Development Report: Development and the Environment (World Bank 1992), and a number of anecdotal studies have emerged in the past several years (e.g., Maltzou 1992; Almeida 1993).Yet, to our knowledge, there has been no rigorous research on why informal firms (or even small-scale firms) do and do not adopt clean technologies. The well-developed empirical and theoretical literature on the diffusion of small-scale cost-saving innovations in developing countries is certainly broadly relevant, but it does not have much to say about the regulation, externalities, and peculiar political and economic considerations that undoubtedly have a significant impact on the diffusion of clean technologies.
