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Power sharing and pollution control : coordinating policies among levels of government

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  • Jack, William

Abstract

Traditional approaches to pollution control emphasize the government's role in providing incentives to alter the behavior of relevant economic agents. But to exploit cost advantages at different levels of government, pollution control policies typically involve assigning a variety of responsibilities to different public agencies. These responsibilities can include choosing policy targets, controlling instruments, and developing and implementing strategies for monitoring and enforcement. A hierarchically decentralized management structure introduces problems of coordination because different agencies may have different objectives. These problems can be alleviated by modifying intergovernmental relations, particularly by using implicit and explicit financial transfers and by dividing initialproperty rights equally among local authorities to ensure that they will want to participate in the negotiating process. The author concludes that : a) no single level of government should be responsible for all environmental policy; b) coordination of government policies may be improved using intergovernmental incentive schemes; c) one can grant the local government financial autonomy, so that funds collected from enforcement are retained locally; d) one can affect the enforcement budget of a local regulator through control of lump sum transfers; and e) under decentralized control, command and control policies may be implemented more efficiently.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 887.

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Date of creation: 30 Apr 1992
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Handle: RePEc:wbk:wbrwps:887

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Related research

Keywords: Environmental Economics&Policies; National Governance; Water and Industry; Economic Theory&Research; Environmental Governance;

References

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  1. Jones, Carol Adaire & Scotchmer, Suzanne, 1990. "The social cost of uniform regulatory standards in a hierarchical government," Journal of Environmental Economics and Management, Elsevier, vol. 19(1), pages 61-72, July.
  2. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
  3. Joseph Farrell., 1987. "Information and the Coase Theorem," Economics Working Papers 8747, University of California at Berkeley.
  4. Stiglitz, J.E., 1988. "Principal And Agent," Papers 12, Princeton, Woodrow Wilson School - Discussion Paper.
  5. Salmon, Pierre, 1987. "Decentralisation as an Incentive Scheme," Oxford Review of Economic Policy, Oxford University Press, vol. 3(2), pages 24-43, Summer.
  6. Downing, Paul B. & Watson, William Jr., 1974. "The economics of enforcing air pollution controls," Journal of Environmental Economics and Management, Elsevier, vol. 1(3), pages 219-236, November.
  7. Theodore Groves & John Ledyard, 1976. "Optimal Allocation of Public Goods: A Solution to the 'Free Rider Problem'," Discussion Papers 144, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Xepapadeas, A. P., 1991. "Environmental policy under imperfect information: Incentives and moral hazard," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 113-126, March.
  9. Bolton, Patrick & Farrell, Joseph, 1990. "Decentralization, Duplication, and Delay," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 803-26, August.
  10. Helm, Dieter & Smith, Stephen, 1987. "The Assessment: Decentralisation and the Economics of Local Government," Oxford Review of Economic Policy, Oxford University Press, vol. 3(2), pages i-xxi, Summer.
  11. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
  12. Jimenez, Emmanuel & Paqueo, Vicente & de Vera, Ma. Lourdes, 1988. "Does local financing make primary schools more efficient : the Philippine case," Policy Research Working Paper Series 69, The World Bank.
  13. Campos, Jose Edgardo L, 1989. "Legislative Institutions, Lobbying, and the Endogenous Choice of Regulatory Instruments: A Political Economy Approach to Instrument Choice," Journal of Law, Economics and Organization, Oxford University Press, vol. 5(2), pages 333-53, Fall.
  14. Eskeland, Gunnar S. & Jimenez, Emmanuel, 1991. "Choosing policy instruments for pollution control : a review," Policy Research Working Paper Series 624, The World Bank.
  15. Joel S. Demski & David E.M. Sappington, 1987. "Hierarchical Regulatory Control," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 369-383, Autumn.
  16. David P. Baron, 1985. "Noncooperative Regulation of a Nonlocalized Externality," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 553-568, Winter.
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Cited by:
  1. Jeni Klugman, 1994. "Decentralization: A Survey of Literature from a Human Development Perspective," Human Development Occasional Papers (1992-2007) HDOCPA-1994-05, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).

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