| Abstract: | The Clean Water State Revolving fund (CWSRF) program provides states with significant discretion to design, implement, and administer the program to meet their water quality needs. An important aspect of the program is the decision whether to leverage existing funds to generate additional capital for loans. This article seeks to explain the leveraging decision process, using three models as explanators. We conceive leveraging as a two-stage process—(1) the decision to leverage and (2) the decision of how much to leverage. By employing regression techniques, we find that the Environmental Protection Agency's (EPA's) stated reasons for leveraging—environmental needs and demand for loans—are not significant in the decision to leverage, although needs are significant at the second stage. Likewise, there is limited support for Lester's (1994 ) "capacity/commitment" model of environmental implementation. A third model employing a larger range of independent variables is the best predictor of both the decision to leverage and the amount of leveraging. Furthermore, the factors important at each stage of the decision process differ substantially, reinforcing our conception of a two-stage decision process. |
