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How Liable should an Exporter be? The Case of Trade in Hazardous Goods

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  • Helm, Carsten

Abstract

This paper analyzes liability issues in the context of internationally traded goods like hazardous waste. If waste disposers of a small open economy are judgement-proof, then the extension of liability to waste exporters distorts the factor allocation and may reduce disposal care. Hence the optimal extension is partial at most. However, extending liability increases incentives of the waste importing country to hold domestic disposers liable. Interaction through the price system and through contracts that condition payments for disposal services on the occurrence of an accident yield identical outcomes if disposers are judgement-proof.

Suggested Citation

  • Helm, Carsten, 2009. "How Liable should an Exporter be? The Case of Trade in Hazardous Goods," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 77444, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:77444
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/77444/
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    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • F18 - International Economics - - Trade - - - Trade and Environment
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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