Voluntary Environmental Agreements when Regulatory Capacity is Weak1

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Voluntary Environmental Agreements when Regulatory Capacity is Weak1

Author Info

Allen Blackman () (Resources for the Future, 1616 P Street, N.W., Washington, DC 20036, USA.)
Thomas P Lyon () (Stephen M. Ross School of Business, University of Michigan, 701 Tappan St., Ann Arbor, MI 48109, USA.)
Nicholas Sisto () (Department of Economics, Instituto Tecnológico y de Estudios Superiores de Monterrey, Ave. E. Garza Sada 2501 Sur C.P. 64849, Monterrey, NL, Mexico.)

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Abstract

Voluntary agreements (VAs) negotiated between environmental regulators and industry are increasingly popular. However, little is known about whether they are likely to be effective in developing and transition countries where local and federal environmental regulatory capacity is typically weak. We develop a dynamic theoretical model to examine the effect of VAs on investment in regulatory infrastructure and pollution abatement in such countries. We find that under certain conditions, VAs can improve welfare by generating more private-sector investment in pollution control and more public-sector investment in regulatory capacity than the status quo. Comparative Economic Studies (2006) 48, 682–702. doi:10.1057/palgrave.ces.8100189

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Article provided by Palgrave Macmillan Journals in its journal Comparative Economic Studies.

Volume (Year): 48 (2006)
Issue (Month): 4 (December)
Pages: 682-702
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Handle: RePEc:pal:compes:v:48:y:2006:i:4:p:682-702

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Paper
- Blackman, Allen & Lyon, Thomas P. & Sisto, Nicholas, 2006. "Voluntary Environmental Agreements when Regulatory Capacity Is Weak," Discussion Papers dp-06-30, Resources For the Future. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Baron, David P., 1989. "Design of regulatory mechanisms and institutions," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 24, pages 1347-1447 Elsevier. [Downloadable!] (restricted)
Matthieu Glachant, 2003. "Voluntary Agreements under Endogenous Legislative Threats," Working Papers 2003.36, Fondazione Eni Enrico Mattei. [Downloadable!]
Segerson, Kathleen & Miceli, Thomas J., 1998. "Voluntary Environmental Agreements: Good or Bad News for Environmental Protection?," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 109-130, September. [Downloadable!] (restricted)
Anna Alberini & Kathleen Segerson, 2002. "Assessing Voluntary Programs to Improve Environmental Quality," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(1), pages 157-184, June. [Downloadable!] (restricted)

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Kalim Shah & Jorge Rivera, 2007. "Export processing zones and corporate environmental performance in emerging economies: The case of the oil, gas, and chemical sectors of Trinidad and Tobago," Policy Sciences, Springer, vol. 40(4), pages 265-285, December. [Downloadable!] (restricted)
Thomas P. Lyon & John W. Maxwell, 2007. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Working Papers 2007-16, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy. [Downloadable!]
Other versions:
- Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Oxford University Press for Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer. [Downloadable!] (restricted)

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