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Applying Economic Instruments in Developing Countries: From Theory to Implementation

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  • David O'Connor

    (OECD Development Centre, Paris, France)

Abstract

This paper proceeds as follows: in the next section we briefly review the experience with the implementation of economic instruments in both OECD countries and developing countries. The types of instruments considered are: pollution taxes/charges, product taxes/charges, deposit-refund schemes, and tradable permits. Also, the related practices of earmarking revenues from EIs and creating specialised environmental funds are considered. In section 3, a general framework is presented for evaluating alternative instruments in terms of their ease of implementation, and in the final section some suggestions are advanced for addressing the more common implementation problems. The question of how environmental policy affects competitiveness in an open economy is also briefly considered.

Suggested Citation

  • David O'Connor, 1995. "Applying Economic Instruments in Developing Countries: From Theory to Implementation," EEPSEA Special and Technical Paper sp199501t3, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jan 1995.
    • Handle: RePEc:eep:tpaper:sp199501t3
    as

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    File URL: http://www.idrc.ca/uploads/user-S/10536145810ACF2AE.pdf
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    References listed on IDEAS

    as
    1. Poterba, James M, 1989. "Lifetime Incidence and the Distributional Burden of Excise Taxes," American Economic Review, American Economic Association, vol. 79(2), pages 325-330, May.
    2. Eskeland, Gunnar S, 1994. "A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee," The World Bank Economic Review, World Bank, vol. 8(3), pages 373-394, September.
    3. Thomas A. Barthold, 1994. "Issues in the Design of Environmental Excise Taxes," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 133-151, Winter.
    4. James M. Poterba, 1991. "Tax Policy to Combat Global Warming: On Designing a Carbon Tax," NBER Working Papers 3649, National Bureau of Economic Research, Inc.
    5. Jean-Philippe Barde, 1994. "Economic Instruments in Environmental Policy: Lessons from the OECD Experience and their Relevance to Developing Economies," OECD Development Centre Working Papers 92, OECD Publishing.
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    Cited by:

    1. Shreekant Gupta, 2003. "Implementing Kyoto-type Flexibility Mechanisms for India: Issues and Prospects," Working papers 117, Centre for Development Economics, Delhi School of Economics.
    2. Shreekant Gupta, 2000. "Incentive-Based Approaches for Mitigating Greenhouse Gas Emissions: Issues and Prospects for India," Working papers 85, Centre for Development Economics, Delhi School of Economics.

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