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Toward a Political Theory of Environmental Policy

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Author Info
Marcel Boyer ()
Jean-Jacques Laffont

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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. Their justification lies in the limitations they impose on the politicians' ability to distribute rents. Some insights are then provided into the question often raised regarding the recent emergence of incentive mechanisms in environmental regulation.

Nous developpons dans cet article quelques jalons d'une économie politique de la politique environnementale. Nous réexaminons le consensus des économistes en faveur de mécanismes sophistiqués de réglementation incitative. Nous insérons tout d'abord la question du choix des instruments dans le cadre général de la construction de mécanismes et nous développons une économie politique à partir d'une analyse de contrats incomplets. Ensuite, nous montrons dans divers contextes pourquoi des contraintes constitutionnelles sur le choix des instruments de politique environnementale peuvent être désirables malgré leur apparente inefficacité économique. Leur justification réside dans les limites qu'elles imposent à la capacité des politiciens de distribuer des rentes. Nos résultats permettent de mieux comprendre l'émergence récente de mécanismes incitatifs en réglementation environnementale.

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Paper provided by CIRANO in its series CIRANO Working Papers with number 96s-07.

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Date of creation: 01 Jan 1996
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Handle: RePEc:cir:cirwor:96s-07

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Related research
Keywords: Environment; Political Economy; Political Theory; Choice of Instruments; Environnement; Économie politique; Théorie politique; Choix d'instruments;

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Find related papers by 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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  1. 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. [Downloadable!] (restricted)
  2. Marcel Boyer & Jean-Jacques Laffont, 1995. "Environmental Protection, Producer Insolvency and Lender Liability," CIRANO Working Papers 95s-50, CIRANO. [Downloadable!]
    Other versions:
  3. 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. [Downloadable!] (restricted)
  4. David P. Baron, 1985. "Noncooperative Regulation of a Nonlocalized Externality," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 553-568, Winter. [Downloadable!] (restricted)
  5. 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 139-47, March. [Downloadable!] (restricted)
  6. Maloney, Michael T & McCormick, Robert E, 1982. "A Positive Theory of Environmental Quality Regulation," Journal of Law & Economics, University of Chicago Press, vol. 25(1), pages 99-123, April.
  7. Roberts, Marc J. & Spence, Michael, 1976. "Effluent charges and licenses under uncertainty," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 193-208. [Downloadable!] (restricted)
  8. Dasgupta, Partha & Hammond, Peter & Maskin, Eric, 1980. "On Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Blackwell Publishing, vol. 47(5), pages 857-60, October. [Downloadable!] (restricted)
  9. 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 976-78, December. [Downloadable!] (restricted)
  10. Dewees, Donald N, 1983. "Instrument Choice in Environmental Policy," Economic Inquiry, Oxford University Press, vol. 21(1), pages 53-71, January.
  11. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-77, March. [Downloadable!] (restricted)
  12. 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 323-31, May. [Downloadable!] (restricted)
  13. Noll, Roger., 1983. "The Political Foundations of Regulatory Policy," Working Papers 486, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
  14. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, vol. 70(5), pages 1037-41, December. [Downloadable!] (restricted)
  15. Hahn, Robert W, 1990. " The Political Economy of Environmental Regulation: Towards a Unifying Framework," Public Choice, Springer, vol. 65(1), pages 21-47, April.
  16. Baron, David P., 1985. "Regulation of prices and pollution under incomplete information," Journal of Public Economics, Elsevier, vol. 28(2), pages 211-231, November. [Downloadable!] (restricted)
  17. Weitzman, Martin L, 1974. "Prices vs. Quantities," Review of Economic Studies, Blackwell Publishing, vol. 41(4), pages 477-91, October. [Downloadable!] (restricted)
    Other versions:
  18. Marcel Boyer & Jean-Jacques Laffont, 1994. "Environmental Risks and Bank Liability," CIRANO Working Papers 94s-22, CIRANO. [Downloadable!]
    Other versions:
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