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Private vs. public regulation: political economy of the international environment

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  • Heyes, Anthony G.
  • Maxwell, John W.

Abstract

Minimum standards set by a ‘World Environmental Organisation’ (WEO) and NGO labelling are promoted as alternative approaches to international environmental protection. We explore the potential inter-play between these two approaches when the WEO is subject to pressure from producers. We find that if WEO and NGO schemes are mutually exclusive then the existence of an NGO ‘alternative’ increases industry resistance to WEO proposals and this may reduce welfare. If, however, the schemes are run in parallel, existence of the NGO lessens producer opposition to WEO activities. This allows the WEO to be ‘bolder’ in its proposals, which is good for welfare.
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Suggested Citation

  • Heyes, Anthony G. & Maxwell, John W., 2004. "Private vs. public regulation: political economy of the international environment," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 978-996, September.
  • Handle: RePEc:eee:jeeman:v:48:y:2004:i:2:p:978-996
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    References listed on IDEAS

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    1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    2. Tracy R. Lewis, 1996. "Protecting the Environment When Costs and Benefits Are Privately Known," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 819-847, Winter.
    3. Lyon, Thomas P. & Maxwell, John W., 2003. "Self-regulation, taxation and public voluntary environmental agreements," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1453-1486, August.
    4. Heyes, Anthony G., 1997. "Environmental Regulation by Private Contest," Journal of Public Economics, Elsevier, vol. 63(3), pages 407-428, February.
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    Cited by:

    1. H. Eggert & M. Greaker, 2011. "Trade, GMOs and Environmental Risk: Are Current Policies Likely to Improve Welfare?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(4), pages 587-608, April.
    2. Eftichios Sartzetakis & Anastasios Xepapadeas & Emmanuel Petrakis, "undated". "The role of information provision as a policy instrument to supplement environmental taxes: Empowering consumers to choose optimally," DEOS Working Papers 1012, Athens University of Economics and Business.
    3. van't Veld, Klaas & Kotchen, Matthew J., 2011. "Green clubs," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 309-322.
    4. Olivier Bonroy & Christos Constantatos, 2015. "On the Economics of Labels: How Their Introduction Affects the Functioning of Markets and the Welfare of All Participants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 239-259.
    5. Patricia Crifo & Vanina Forget, 2013. "La responsabilité sociale et environnementale des entreprises : mirage ou virage ?," Working Papers hal-00830642, HAL.
    6. Adel Ben Youssef & Rim Lahmandi-Ayed, 2008. "Eco-labelling, Competition and Environment: Endogenization of Labelling Criteria," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(2), pages 133-154, October.
    7. Lucie Bottega & Jenny De Freitas, 2009. "Public, Private and Nonprofit Regulation for Environmental Quality," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 105-123, March.
    8. Cheng, Chu-Chuan & Lai, Yu-Bong, 2012. "Does a stricter enforcement policy protect the environment? A political economy perspective," Resource and Energy Economics, Elsevier, vol. 34(4), pages 431-441.
    9. Philippe Mahenc, 2015. "Honest versus Misleading Certification," CEEES Paper Series CE3S-06/15, European University at St. Petersburg, Department of Economics.
    10. Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer.
    11. repec:gbl:wpaper:2013-01 is not listed on IDEAS
    12. Carmen Arguedas & Esther Blanco, 2014. "Incentives for Voluntary Practices, Fraud, and Certification," Working Papers 2014-18, Faculty of Economics and Statistics, University of Innsbruck.
    13. Esther Blanco & Javier Lozano, 2015. "Ecolabels, uncertified abatement, and the sustainability of natural resources: an evolutionary approach," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 623-647, July.
    14. repec:kap:regeco:v:52:y:2017:i:3:d:10.1007_s11149-017-9339-5 is not listed on IDEAS
    15. Barbier, Edward B. & Bulte, Erwin H., 2004. "Introduction to the symposium on trade, renewable resources and biodiversity," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 883-890, September.
    16. Ben Youssef Adel & Abderrazak Chema, 2009. "Multiplicity of Eco-Labels, Competition, and the Environment," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 7(2), pages 1-24, December.
    17. Patricia Crifo & Vanina Forget, 2012. "The Economics of Corporate Social Responsibility: A Survey," Working Papers hal-00720640, HAL.
    18. Buehler, Benno & Schuett, Florian, 2014. "Certification and minimum quality standards when some consumers are uninformed," European Economic Review, Elsevier, vol. 70(C), pages 493-511.
    19. Patricia Crifo & Vanina D. Forget, 2014. "Pourquoi s’engager volontairement dans la transition énergétique ? Enseignements de la littérature sur la responsabilité sociale et environnementale des entreprises," Revue d'économie industrielle, De Boeck Université, vol. 0(4), pages 349-381.
    20. Soham Baksi & Pinaki Bose, 2007. "Credence Goods, Efficient Labelling Policies, and Regulatory Enforcement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(2), pages 411-430, June.
    21. Pio Baake & Helene Naegele, 2017. "Competition between For-Profit and Industry Labels: The Case of Social Labels in the Coffee Market," Discussion Papers of DIW Berlin 1686, DIW Berlin, German Institute for Economic Research.
    22. Anthony Heyes & Marcel Oestreich, 2017. "The Optimal NGO Chief: Strategic Delegation in Social Advocacy," Working Papers 1701, Brock University, Department of Economics.
    23. Arguedas, Carmen & Blanco, Esther, 2014. "On Fraud and Certification of Corporate Social Responsibility," Working Papers in Economic Theory 2014/02, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    24. Mireille Chiroleu-Assouline, 2016. "Multiple Standards: the Case of the French Building Industry," Policy Papers 2016.08, FAERE - French Association of Environmental and Resource Economists.

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