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A Comparison Of The Effectiveness Of Incentives And Directives: The Case Of Dutch Water Quality Policy

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  • Hans Th. A. Bressers

Abstract

The use of effluent charges as an instrument o f regulatory policy has been the object of much dispute. The controversy between advocates and opponents of replacing directives by incentive strategies in various fields of public intervention has always been rather heated, though carried on more in terms of theory than of empirical evidence drawn from experience with policy instruments in actual operation. Much like permit trading in the United States, regulatory effluent charges in The Netherlands more or less “sneaked in through the back door.” The Dutch system o f water quality charges had originally been designed to fulfill solely a revenue‐raising function. The unique features of The Netherlands system make it an interesting example of the use of charges. The Dutch system of effluent charges has been in operation since 1970 and, in terms of the level of the charges, is more than twice as large as the more recent German program. Furthermore its use as a regulatory instrument has been “accidental.” It did not replace the official intervention strategy of direct regulation. Given this situation, the Dutch case provides a unique opportunity to examine the effects of these two approaches as they were applied to the same case. Three statistical analyses of the impacts of the policy instrument used, supplemented by two expert assessments of these impacts, show the Dutch effluent charges have had a very remarkable effect on industrial polluters. In Holland, t h e water quality policy i s regarded as one of t h e few examples o f successful governmental intervention. The final section presents some general thoughts on relevance of the Dutch experience with effluent charges for other countries.

Suggested Citation

  • Hans Th. A. Bressers, 1988. "A Comparison Of The Effectiveness Of Incentives And Directives: The Case Of Dutch Water Quality Policy," Review of Policy Research, Policy Studies Organization, vol. 7(3), pages 500-518, March.
  • Handle: RePEc:bla:revpol:v:7:y:1988:i:3:p:500-518
    DOI: 10.1111/j.1541-1338.1988.tb00850.x
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    Cited by:

    1. A.G. Conway, 1991. "Fonction des instruments économiques pour la réconciliation des politiques agricoles et environnementales suivant le principe pollueur-payeur," Économie rurale, Programme National Persée, vol. 205(1), pages 44-52.
    2. Boyd, James, 2003. "Water Pollution Taxes: A Good Idea Doomed to Failure?," Discussion Papers 10611, Resources for the Future.
    3. Boyd, James, 2003. "Water Pollution Taxes: A Good Idea Doomed to Failure?," RFF Working Paper Series dp-03-20, Resources for the Future.
    4. René Kemp, 1998. "The Diffusion of Biological Waste-Water Treatment Plants in the Dutch Food and Beverage Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(1), pages 113-136, July.
    5. Mikael Andersen, 1999. "Governance by green taxes: implementing clean water policies in Europe 1970–1990," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 2(1), pages 39-63, March.

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