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Environmental Regulatory Competition: A Status Report and Some New Evident

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Concerns about devolving environmental regulatory powers to lower levels of government permeate debates in the U.S. and Europe about the appropriate level of regulatory authority. In theory, given a long list of conditions, regulatory competition by local governments can be efficient in the same way that tax competition can be efficient: local welfare-maximizing governments set the same standards or taxes as would an omniscient welfare-maximizing central government. In practice, however, these conditions are improbable, especially in the case of environmental regulations, and local competition is potentially inefficient. In the past two years, evidence has begun to emerge regarding the empirical importance of these inefficiencies. In this paper, I describe this nascent literature, drawing parallels to the tax competition literature, suggest some avenues for empirical research, and present some new results.

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Bibliographic Info

Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~02-02-07.

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Date of creation: 07 Feb 2002
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Handle: RePEc:geo:guwopa:gueconwpa~02-02-07

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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
Phone: 202-687-6074
Fax: 202-687-6102
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Web page: http://econ.georgetown.edu/

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Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
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Web: http://econ.georgetown.edu/

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References

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  1. Daniel L. Millimet, 2003. "Assessing the Empirical Impact of Environmental Federalism," Journal of Regional Science, Wiley Blackwell, vol. 43(4), pages 711-733.
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  7. Josh Ederington, 2001. "International Coordination of Trade and Domestic Policies," American Economic Review, American Economic Association, vol. 91(5), pages 1580-1593, December.
  8. Heyndels, Bruno & Vuchelen, Jef, 1998. "Tax Mimicking Among Belgian Municipalities," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 89-101, March Cit.
  9. Arik Levinson, 1999. "An Industry-Adjusted Index of State Environmental Compliance Costs," Working Papers gueconwpa~00-00-08, Georgetown University, Department of Economics.
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  11. Hilary Sigman, 2002. "Letting States Do the Dirty Work: State Responsibility for Federal Environmental Regulation," Departmental Working Papers 200228, Rutgers University, Department of Economics.
  12. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June Cita.
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  14. Daniel L. Millimet & John A. List, 2003. "A Natural Experiment on the 'Race to the Bottom' Hypothesis: Testing for Stochastic Dominance in Temporal Pollution Trends," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 395-420, 09.
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  17. Fredriksson, Per G. & Millimet, Daniel L., 2002. "Is there a 'California effect' in US environmental policymaking?," Regional Science and Urban Economics, Elsevier, vol. 32(6), pages 737-764, November.
  18. Robert Tannenwald, 1998. "Devolution: the new federalism, an overview," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 1-12.
  19. Levinson, Arik, 1997. "A Note on Environmental Federalism: Interpreting Some Contradictory Results," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 359-366, July.
  20. Arik Levinson, 1999. "State Taxes and Interstate Hazardous Waste Shipments," American Economic Review, American Economic Association, vol. 89(3), pages 666-677, June.
  21. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April.
  22. Rosanne Altshuler & Timothy J. Goodspeed, 2002. "Follow the Leader? Evidence on European and U.S. Tax Competition," Departmental Working Papers 200226, Rutgers University, Department of Economics.
  23. Levinson, Arik, 1999. "NIMBY taxes matter: the case of state hazardous waste disposal taxes," Journal of Public Economics, Elsevier, vol. 74(1), pages 31-51, October.
  24. James R. Markusen & Edward R. Morey & Nancy Olewiler, 1992. "Noncooperative Equilibria in Regional Environmental Policies When Plant Locations are Endogenous," NBER Working Papers 4051, National Bureau of Economic Research, Inc.
  25. Randy Becker & Vernon Henderson, 2000. "Effects of Air Quality Regulations on Polluting Industries," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 379-421, April.
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Citations

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Cited by:
  1. James Alm & H. Spencer Banzhaf, 2011. "Designing Economic Instruments for the Environment in a Decentralized Fiscal System," Working Papers 1104, Tulane University, Department of Economics.
  2. Hilary Sigman, 2004. "Transboundary Spillovers and Decentralization of Environmental Policies," NBER Working Papers 10717, National Bureau of Economic Research, Inc.
  3. Busse, Matthias, 2004. "Trade, environmental regulations and the World Trade Organization : new empirical evidence," Policy Research Working Paper Series 3361, The World Bank.
  4. Hilary Sigman, 2007. "Decentralization and Environmental Quality: An International Analysis of Water Pollution," NBER Working Papers 13098, National Bureau of Economic Research, Inc.
  5. Michiel Evers & Herman R. J. Vollebergh & Ruud A. de Mooij, 2004. "Tax Competition under Minimum Rates: The Case of European Diesel Excises," CESifo Working Paper Series 1221, CESifo Group Munich.
  6. Federico Revelli, 2005. "On Spatial Public Finance Empirics," International Tax and Public Finance, Springer, vol. 12(4), pages 475-492, August.
  7. Kelly B. Maguire & Robin R. Jenkins, 2009. "State Hazardous and Solid Waste Taxes: Understanding Their Variability," NCEE Working Paper Series 200901, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jun 2009.

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