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Stimulating Mechanisms in Ecologically Motivated Regulation: Will Ecological Policies in Transition and Developing Countries Become Efficient?

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  • Matveenko, V.

    (Institute for Economics and Mathematics of Russian Academy of Sciences, St. Petersburg, Russia)

Abstract

In this paper, the theory of stimulating mechanisms is used to study the relationship between characteristics of polluting firms and results of ecological policy. It is shown that the optimal ecologically motivated policy can qualitatively change in accordance with a relative effectiveness of types of firms. Two models are proposed. In the first of them the regulator has no information on a type of firm but possesses information about cost functions of the types of firms. In the second (game) model, moreover, the regulator has no information about levels of investment chosen by the types of firms.

Suggested Citation

  • Matveenko, V., 2010. "Stimulating Mechanisms in Ecologically Motivated Regulation: Will Ecological Policies in Transition and Developing Countries Become Efficient?," Journal of the New Economic Association, New Economic Association, issue 8, pages 10-34.
    • Handle: RePEc:nea:journl:y:2010:i:8:p:10-34
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    References listed on IDEAS

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    Cited by:

    1. Bagrat Yerznkyan, 2012. "Pluralistic Institutional Solutions Of The Problem Of Externalities," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 8(2), pages 73-86.

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    More about this item

    Keywords

    ecological policy; regulation; stimulating mechanism; contract; relative economic effectiveness; Nash equilibrium; developing and transition economies;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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