Dumping the Rules: Governance Failures in Commercial Waste Market in Sweden

Abstract

Illegal waste management has become a serious and growing problem in Sweden, imposing substantial environmental and fiscal costs. The Think Pink scandal, where around 200,000 tonnes of waste were illegally dumped across 15 municipalities, illustrates both the scale and the systemic nature of this problem. This paper examines how governance failures enable non-compliance in Sweden’s commercial waste market. Drawing on market governance theory and Howlett and Ramesh's (2014) distinction between design mismatches and capacity deficits, it argues that both are present and mutually reinforcing. Waste utilization services share key characteristics with credence goods, generating information asymmetries that, combined with negative externalities and weak enforcement, create incentives for non-compliance. The analysis is based on semi structured interviews with regulatory and enforcement officials. The results show that high compliance costs, both fiscal and organizational, imposed by the regulatory framework, generate demand for non-compliant services, while inconsistent sanctioning and fragmented oversight facilitate their supply. The paper concludes that non compliant and illegal waste management reflects systemic vulnerabilities in market governance rather than isolated enforcement failures.