Relative Efficiency of Voluntary Versus Mandatory Environmental Regulations (The)
AbstractIncreased use of voluntary programs for environmental protection as an alternative to mandatory approaches raises the issue of the relative efficiency of the two approaches. This paper analyzes the efficiency of voluntary programs relative to mandatory programs in agriculture. Under the voluntary program producers adopt a land conservation practice and, in turn, the government provides technical and financial assistance. The voluntary program is more efficient than a program that mandates adoption if and only if the deadweight losses of government expenditures under the voluntary program are less than the difference between private and public costs of government services plus the additional implementation costs of the mandatory program. This necessary and sufficient condition is more likely to be satisfied when (a) the deadweight loss from raising government revenue is zero or small, (b) government services are less rival, (c) the costs of government services are lower than what farmers would have to pay for equivalent private services, (d) the number of farms in the program is large, and (e) the saving in implementation costs under the voluntary program is large and increases rapidly with program acreage.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1014.
Date of creation: 01 Jan 1999
Date of revision:
Publication status: Published in Journal of Environmental Economics and Management 1999, vol. 38, pp. 158-175
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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Other versions of this item:
- JunJie Wu & Bruce A. Babcock, 1996. "Relative Efficiency of Voluntary Versus Mandatory Environmental Regulations, The," Center for Agricultural and Rural Development (CARD) Publications 96-wp172, Center for Agricultural and Rural Development (CARD) at Iowa State University.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Feng, Hongli & Kling, Catherine L. & Kurkalova, Lyubov A. & Secchi, Silvia, 2007. "Cac Versus Incentive-Based Instruments in Agriculture: The Case of the Conservation Reserve Program," Staff General Research Papers 10796, Iowa State University, Department of Economics.
- Juutinen, Artti & Mäntymaa, Erkki & Ollikainen, Markku, 2013. "Landowners’ conservation motives and the size of information rents in environmental bidding systems," Journal of Forest Economics, Elsevier, vol. 19(2), pages 128-148.
- Khanna, Madhu & Isik, Murat & Zilberman, David, 2002. "Cost-effectiveness of alternative green payment policies for conservation technology adoption with heterogeneous land quality," Agricultural Economics, Blackwell, vol. 27(2), pages 157-174, August.
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