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Why do policy decision-makers opt for command and control environmental regulation? An economic analysis with special reference to Sri Lanka

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Author Info

  • Clevo Wilson

    ()
    (QUT)

  • Manel Jayamanna

    ()

  • Wasantha Athukorala

    ()
    (QUT)

Abstract

This chapter examines why policy decision-makers opt for command and control environmental regulation despite the availability of a plethora of market-based instruments which are more efficient and cost-effective. Interestingly, Sri Lanka has adopted a wholly command and control system, during both the pre and post liberalisation economic policies. This chapter first examines the merits and demerits of command and control and market-based approaches and then looks at Sri Lanka’s extensive environmental regulatory framework. The chapter then examines the likely reasons as to why the country has gone down the path of inflexible regulatory measures and has become entrenched in them. The various hypotheses are discussed and empirical evidence is provided. The chapter also discusses the consequences of an environmentally slack economy and policy implications stemming from adopting a wholly regulatory approach. The chapter concludes with a discussion of the main results.

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File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2010/WP259.pdf
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Bibliographic Info

Paper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 259.

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Length: 28 pages
Date of creation: 30 Jul 2010
Date of revision:
Handle: RePEc:qut:dpaper:259

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Postal: GPO Box 2434, BRISBANE QLD 4001
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Web page: http://www.bus.qut.edu.au/faculty/economics/
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Keywords: Command and control vs market-based instruments; Environmental and health effects; Economic analysis; Policy implications;

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  1. Motta, Ronaldo Ser A Da & Huber, Richard M. & Ruitenbeek, H. Jack, 1999. "Market based instruments for environmental policymaking in Latin America and the Caribbean: lessons from eleven countries," Environment and Development Economics, Cambridge University Press, vol. 4(02), pages 177-201, May.
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