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articles: Negotiation versus manipulation: The impact of alternate forms of LDC government behavior on the design of international environmental agreements

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  • Amitrajeet A. Batabyal

    (Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA)

Abstract

This article addresses the problem faced by an asymmetrically informed supra-national governmental authority (SNGA) with limited funds that wishes to design an international environmental agreement (IEA) for less developed countries (LDCs). The SNGA can only deal with polluting firms in the LDCs through their national governments. This tripartite hierarchical interaction is studied for two LDCs. The private information of the firms and the governments across the two countries is perfectly correlated. In this setting, we study the effects of two kinds of behavior by the governments of the LDCs. We show that despite the perfect correlation in the private information of governments and firms across the two countries, the SNGA cannot design a first-best IEA. Our analysis suggests that problems arising from the SNGA's inability to monitor the actions of the polluting firms and the national governments are less salient than is commonly believed. However, there is no denying the fact that the succ ess of IEAs is dependent not only on the funds available for environmental protection, but also on the manner in which LDC governments represent polluting firms in their countries.

Suggested Citation

  • Amitrajeet A. Batabyal, 2001. "articles: Negotiation versus manipulation: The impact of alternate forms of LDC government behavior on the design of international environmental agreements," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(1), pages 25-44.
  • Handle: RePEc:spr:presci:v:80:y:2001:i:1:p:25-44
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    Cited by:

    1. Amitrajeet A Batabyal & Hamid Beladi, 2002. "Designing Collusion-Proof International Environmental Agreements: Developing Countries and Polluting Firms," Environment and Planning A, , vol. 34(1), pages 101-118, January.

    More about this item

    Keywords

    International environmental agreement; LDC government; perfect correlation;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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