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Toward a Political Theory of Environmental Policy

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  • Marcel Boyer
  • Jean-Jacques Laffont

Abstract

This paper makes some steps toward a formal political economy of environmental policy. Economists' quasi-unanimous preferences for sophisticated incentive regulation is reconsidered. First, we recast the question of instrument choice in the general mechanism literature and provide an incomplete contract approach to political economy. Then, in various settings, we show why "constitutional" constraints on the instruments of environmental policy may be desirable, even though they appear inefficient from a purely standard economic viewpoint.
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Suggested Citation

  • Marcel Boyer & Jean-Jacques Laffont, 1996. "Toward a Political Theory of Environmental Policy," CIRANO Working Papers 96s-07, CIRANO.
    • Handle: RePEc:cir:cirwor:96s-07
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    File URL: https://cirano.qc.ca/files/publications/96s-07.pdf
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    References listed on IDEAS

    as
    1. Martin L. Weitzman, 1974. "Prices vs. Quantities," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 477-491.
    2. Marcel Boyer & Jean-Jacques Laffont, 1996. "Environmental protection, producer insolvency and lender liability," Chapters, in: Anastasios Xepapadeas (ed.), Economic Policy for the Environment and Natural Resources, chapter 1, pages 1-29, Edward Elgar Publishing.
    3. David P. Baron, 1985. "Noncooperative Regulation of a Nonlocalized Externality," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 553-568, Winter.
    4. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-147, March.
    5. Dewees, Donald N, 1983. "Instrument Choice in Environmental Policy," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 53-71, January.
    6. Yohe, Gary W, 1976. "Polluters' Profits and Political Response: Direct Control versus Taxes: Comment," American Economic Review, American Economic Association, vol. 66(5), pages 981-982, December.
    7. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, vol. 70(5), pages 1037-1041, December.
    8. Baron, David P., 1985. "Regulation of prices and pollution under incomplete information," Journal of Public Economics, Elsevier, vol. 28(2), pages 211-231, November.
    9. Lee, Dwight R., 1975. "Efficiency of pollution taxation and market structure," Journal of Environmental Economics and Management, Elsevier, vol. 2(1), pages 69-72, September.
    10. Coelho, Philip R P, 1976. "Polluters' Profits and Political Response: Direct Control versus Taxes: Comment," American Economic Review, American Economic Association, vol. 66(5), pages 976-978, December.
    11. Partha Dasgupta & Peter Hammond & Eric Maskin, 1980. "On Imperfect Information and Optimal Pollution Control," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(5), pages 857-860.
    12. Loeb, Martin & Magat, Wesley A, 1979. "A Decentralized Method for Utility Regulation," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 399-404, October.
    13. Boyer, Marcel & Laffont, Jean-Jacques, 1997. "Environmental risks and bank liability," European Economic Review, Elsevier, vol. 41(8), pages 1427-1459, August.
    14. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December.
    15. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-177, March.
    16. Donald N. Dewees & W. A. Sims, 1976. "The Symmetry of Effluent Charges and Subsidies for Pollution Control," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 323-331, May.
    17. Hahn, Robert W, 1990. "The Political Economy of Environmental Regulation: Towards a Unifying Framework," Public Choice, Springer, vol. 65(1), pages 21-47, April.
    18. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    19. Maloney, Michael T & McCormick, Robert E, 1982. "A Positive Theory of Environmental Quality Regulation," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 99-123, April.
    20. Roberts, Marc J. & Spence, Michael, 1976. "Effluent charges and licenses under uncertainty," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 193-208.
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    Cited by:

    1. Ulph, Alistair, 1998. "Political institutions and the design of environmental policy in a federal system with asymmetric information," European Economic Review, Elsevier, vol. 42(3-5), pages 583-592, May.
    2. Amigues, Jean-Pierre & Favard, Pascal & Gaudet, Gerard & Moreaux, Michel, 1998. "On the Optimal Order of Natural Resource Use When the Capacity of the Inexhaustible Substitute Is Limited," Journal of Economic Theory, Elsevier, vol. 80(1), pages 153-170, May.

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    More about this item

    Keywords

    Environment; Political Economy; Political Theory; Choice of Instruments; Environnement; Économie politique; Théorie politique; Choix d'instruments;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H1 - Public Economics - - Structure and Scope of Government
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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