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Why Does Environmental Policy in Representative Democracies Tend to Be Inadequate? A Preliminary Public Choice Analysis

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  • Andrea Kollmann

    (Energy Institute, Johannes Kepler University, Linz, Altenberger Straße 69, 4040 Linz, Austria)

  • Friedrich Schneider

    (Institute of Economics, Johannes Kepler University, Linz, Altenberger Straße 69, 4040 Linz, Austria)

Abstract

There is a widespread consensus among the most important players in developed countries (voters, politicians, producers, traditional and green interest groups and bureaucracies) that a shift towards an eco-social market economy is essential for sustainable growth. Nevertheless, market-based instruments have not as yet been implemented satisfactorily in environmental policy. To identify the reasons for this insufficient implementation over the past decade, the Public Choice theory is used. The players’ behavior is analyzed in order to show that their incentives for implementing market-based instruments in environmental policy, instead of command-and-control measures, are surprisingly weak. Knowing the obstacles to implementing market-based instruments provides valuable insight into how to overcome them.

Suggested Citation

  • Andrea Kollmann & Friedrich Schneider, 2010. "Why Does Environmental Policy in Representative Democracies Tend to Be Inadequate? A Preliminary Public Choice Analysis," Sustainability, MDPI, vol. 2(12), pages 1-25, November.
    • Handle: RePEc:gam:jsusta:v:2:y:2010:i:12:p:3710-3734:d:10376
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    6. Sven Rudolph & Friedrich Schneider, 2011. "Did the Japanese Patient Follow the Doctor's Orders? Mostly no! A Public Choice Analysis of Greenhouse Gas Emissions Trading Schemes in Japan before and after the Earthquake," CESifo Working Paper Series 3639, CESifo.
    7. Sven Rudolph & Friedrich Schneider, 2013. "Political barriers of implementing carbon markets in Japan: A Public Choice analysis and the empirical evidence before and after the Fukushima nuclear disaster," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(2), pages 211-235, April.
    8. Markus Pasche, 2013. "What Can be Learned from Behavioural Economics for Environmental Policy?," Jena Economics Research Papers 2013-020, Friedrich-Schiller-University Jena.
    9. Lukas Benz & Stefan Paulus & Julia Scherer & Janik Syryca & Stefan Trück, 2021. "Investors' carbon risk exposure and their potential for shareholder engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 282-301, January.
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    More about this item

    Keywords

    public choice and environmental policies; sustainability; voters; government; interest groups; tradable permits; green taxes [D23; D62; D72; D73; H23; Q57; Q58];
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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