How much regulation is optimal for the brick manufacturing industry in developing economies? – Experiences from Bangladesh, India, and Nepal

Abstract

Brick manufacturing is one of the fast-growing and economically important industries in Bangladesh and the neighboring developing countries. Its growth is synchronized with the increasing demand for bricks in the construction sector of these countries. However, the growth in this industry appears to be unplanned and thus, it is leading to the deterioration of the environment including air pollution, forest destruction, and soil degradation, aligned regulation is also gradually getting more stringent. In this study, the latest and relevant rules and laws have been summarized to highlight the historical development of brick kiln regulations in Bangladesh, India, and Nepal. Nevertheless, Bangladesh has been chosen as a case to understand brick kiln owners’ compliance status with applicable regulations in Bangladesh, India, and Nepal. A total of 140 brick kilns were studied from four districts in the country. Socioeconomic factors affecting the degree of compliance of the industry to legal tools have been evaluated using logistic regression. The study shows that every brick kiln violated at least one Section of the Act. Per unit brick production cost has significantly increased due to compliance. This study also reveals that kilns with environmental clearance certificates were more likely to adopt modern technology. However, the kiln’s age, penalty, and production cost had a negative relationship with the adoption of modern technology. Total income from brick kilns and possession of an environmental clearance certificate was positively linked to the choice of coal or gas as a fuel rather than wood. In contrast, bribe and production size were less likely to affect the fuel compliance of the kilns. The study has identified the factors that require the attention of policymakers to enhance the practicability of the law at the field level.