Government Failure: The Case of Global Environmental Mismanagement
AbstractPollution and polluters can move across national boundaries, but governments which seek to maximize social welfare should coordinate optimal environmental protection through transfer payments or commitments. However, governments may respond to political pressure rather than maximize social welfare, in case the environment is likely to be downgraded due to asymmetric costs, unborn generations, and asymmetries in information. Government failure in one country may reduce the optimal level of cleaning in another country. The findings are applied to atmospheric emissions, deforestation, consumption of tobacco, and the role of mu1tinational corporations. It is suggested that sustainable development should be supported through an international institution which compensates for government failure.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 287.
Length: 27 pages
Date of creation: Dec 1990
Date of revision:
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More information through EDIRC
Environment; Social welfare; Asymmetries;
Find related papers by JEL classification:
- Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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- Robert Gibbons, 1988.
"Learning in Equilibrium Models of Arbitration,"
485, Massachusetts Institute of Technology (MIT), Department of Economics.
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