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The Siting of Hazardous Waste Facilities in Federal Systems: The Political Economy of NIMBY

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  • Per Fredriksson

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Abstract

This paper offers a new political economy explanation for thepervasive problem of siting hazardous waste treatment facilitiesin federal system. We first show that a decentralized systemyields the first-best waste treatment capacity level and that acentralized structure gives rise to free-riding behavior amonglocal jurisdictions. In our model, each community seeks toinfluence the central government through political contributions.This leads to suboptimal levels of treatment capacity. Thecapacity is increasing in the compensation level if the marginalbenefit of treatment capacity is sufficiently large, and in thegovernment's weight on aggregate social welfare relative tolobbying activities. The centralized system can replicate thedecentralized system with a sufficiently high compensation level.Since compensation has proved difficult, a centralized systemfaces greater obstacles than a decentralized system. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Per Fredriksson, 2000. "The Siting of Hazardous Waste Facilities in Federal Systems: The Political Economy of NIMBY," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(1), pages 75-87, January.
  • Handle: RePEc:kap:enreec:v:15:y:2000:i:1:p:75-87
    DOI: 10.1023/A:1008313612369
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    References listed on IDEAS

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    1. Per G. Fredriksson, 1999. "The Political Economy of Trade Liberalization and Environmental Policy," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 513-535, January.
    2. Grossman, Gene M & Helpman, Elhanan, 1995. "Trade Wars and Trade Talks," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 675-708, August.
    3. Sigman, Hilary, 1996. "The Effects of Hazardous Waste Taxes on Waste Generation and Disposal," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 199-217, March.
    4. Grossman, Gene M & Helpman, Elhanan, 1995. "The Politics of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 85(4), pages 667-690, September.
    5. Kunreuther, Howard & Kleindorfer, Paul R, 1986. "A Sealed-Bid Auction Mechanism for Siting Noxious Facilities," American Economic Review, American Economic Association, vol. 76(2), pages 295-299, May.
    6. Ingberman Daniel E., 1995. "Siting Noxious Facilities: Are Markets Efficient?," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 20-33, November.
    7. O'Sullivan Arthur, 1993. "Voluntary Auctions for Noxious Facilities: Incentives to Participate and the Efficiency of Siting Decisions," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 12-26, July.
    8. Fredriksson, Per G., 1997. "The Political Economy of Pollution Taxes in a Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 33(1), pages 44-58, May.
    9. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-769, August.
    10. Aidt, Toke S., 1998. "Political internalization of economic externalities and environmental policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 1-16, July.
    11. Frey, Bruno S & Oberholzer-Gee, Felix & Eichenberger, Reiner, 1996. "The Old Lady Visits Your Backyard: A Tale of Morals and Markets," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1297-1313, December.
    12. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
    13. Mitchell, Robert Cameron & Carson, Richard T, 1986. "Property Rights, Protest, and the Siting of Hazardous Waste Facilities," American Economic Review, American Economic Association, vol. 76(2), pages 285-290, May.
    14. Kunreuther, Howard & Kleindorfer, Paul & Knez, Peter J. & Yaksick, Rudy, 1987. "A compensation mechanism for siting noxious facilities: Theory and experimental design," Journal of Environmental Economics and Management, Elsevier, vol. 14(4), pages 371-383, December.
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    Cited by:

    1. Amitrajeet Batabyal & Hamid Beladi, 2012. "A simple auction mechanism for locating noxious facilities," Letters in Spatial and Resource Sciences, Springer, vol. 5(1), pages 1-6, March.
    2. Garrone, Paola & Groppi, Angelamaria, 2012. "Siting locally-unwanted facilities: What can be learnt from the location of Italian power plants," Energy Policy, Elsevier, vol. 45(C), pages 176-186.
    3. Bellettini, Giorgio & Kempf, Hubert, 2013. "Why not in your backyard? On the location and size of a public facility," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 22-30.
    4. Bert Saveyn, 2013. "On NIMBY and commuting," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(2), pages 293-311, April.
    5. Krutilla Kerry & Alexeev Alexander, 2012. "The Normative Implications of Political Decision-Making for Benefit-Cost Analysis," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(2), pages 1-36, May.
    6. Polk, Andreas & Schmutzler, Armin & Müller, Adrian, 2014. "Lobbying and the power of multinational firms," European Journal of Political Economy, Elsevier, vol. 36(C), pages 209-227.
    7. Saveyn Bert, 2006. "Are NIMBY's commuters?," Energy, Transport and Environment Working Papers Series ete0604, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    8. Laura Levaggi & Rosella Levaggi & Carmine Trecroci, 2015. "Waste disposal and decentralisation: a welfare approach," Working papers 17, Società Italiana di Economia Pubblica.

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