How liable should an exporter be?: The case of trade in hazardous goods
AbstractThis paper analyzes liability issues in the context of internationally traded goods like hazardous waste. It focuses on waste disposers of a small open economy that are judgement-proof due to either wealth constraints or regulatory liability limits. In this case, the extension of liability to waste exporters distorts the factor allocation and may reduce disposal care. Hence the optimal extension is partial at most. However, extending liability increases incentives of the waste importing country to hold domestic disposers liable. Interaction through the price system and through contracts that condition payments for disposal services on the occurrence of an accident yield identical outcomes if disposers are judgement-proof.
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Bibliographic InfoArticle provided by Elsevier in its journal International Review of Law and Economics.
Volume (Year): 28 (2008)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/irle
Extended liability Hazardous waste trade Externalities Moral hazard;
Other versions of this item:
- Helm, Carsten, 2005. "How Liable should an Exporter be? The Case of Trade in Hazardous Goods," Darmstadt Discussion Papers in Economics 36799, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
- Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
- F18 - International Economics - - Trade - - - Trade and Environment
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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