Regulatory Policy Design for Agroecosystem Management on Public Rangelands
AbstractThis paper analyzes regulatory design for agroecosystem management on public rangelands. We present an informational and institutional environment where three of the most prominent regulatory instruments on public rangelands – input regulation, cost-sharing/taxation, and performance regulation – can be defined and compared. The paper examines how the optimal regulation is shaped by the informational and institutional constraints faced by federal land management agencies (FLMAs) such as the Bureau of Land Management and the U.S. Forest Service. These constraints include informational asymmetries between ranchers and FLMAs, limitations on FLMAs’ ability to monitor ranch-level ecological conditions, and constraints on FLMAs’ actions due to budget limitations and restrictions on the level of penalties they can assess. The theoretical model extends the previous work of Baker (1992), Prendergast (2002), and Hueth and Melkonyan (2009) by considering optimal regulation by a budget-constrained regulator in an environment of asymmetric information and moral hazard.
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Bibliographic InfoPaper provided by University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics in its series Working Papers with number 10-007.
Length: 47 pages
Date of creation: Oct 2010
Date of revision:
Agri-Environmental Policy; Asymmetric Information; Budget-Constrained Regulation;
Other versions of this item:
- Tigran Melkonyan & Michael H. Taylor, 2013. "Regulatory Policy Design for Agroecosystem Management on Public Rangelands," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(3), pages 606-627.
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-11-06 (Agricultural Economics)
- NEP-ALL-2010-11-06 (All new papers)
- NEP-CTA-2010-11-06 (Contract Theory & Applications)
- NEP-CWA-2010-11-06 (Central & Western Asia)
- NEP-ENV-2010-11-06 (Environmental Economics)
- NEP-REG-2010-11-06 (Regulation)
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