A part of the literature on fiscal federalism aver the years has dealt with environmental policy as a particular case of the supply of public goods. The centrai issue is the identification of criteria on how to allocate powers and functions aver environmental management at different levels of govemment. The main stream of literature focuses on the conditions needed to establish whether pollution standards and regulatory programs should be set and designed by centraI or rather by local governments. This paper provides a review of the debate and explores a few potential limits of the prevailing line of enquiry.
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