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Government Failure: The Case of Global Environmental Mismanagement

Author

Listed:
  • Andersson, Thomas

    (Research Institute of Industrial Economics (IFN))

Abstract

Pollution and polluters can move across national boundaries, but governments which seek to maximize social welfare should coordinate optimal environmental protection through transfer payments or commitments. However, governments may respond to political pressure rather than maximize social welfare, in case the environment is likely to be downgraded due to asymmetric costs, unborn generations, and asymmetries in information. Government failure in one country may reduce the optimal level of cleaning in another country. The findings are applied to atmospheric emissions, deforestation, consumption of tobacco, and the role of mu1tinational corporations. It is suggested that sustainable development should be supported through an international institution which compensates for government failure.

Suggested Citation

  • Andersson, Thomas, 1990. "Government Failure: The Case of Global Environmental Mismanagement," Working Paper Series 287, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0287
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    File URL: https://www.ifn.se/wfiles/wp/wp287.pdf
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    References listed on IDEAS

    as
    1. Rogoff, Kenneth, 1990. "Bargaining and International Policy Cooperation," American Economic Review, American Economic Association, vol. 80(2), pages 139-142, May.
    2. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    3. Gibbons, Robert, 1988. "Learning in Equilibrium Models of Arbitration," American Economic Review, American Economic Association, vol. 78(5), pages 896-912, December.
    4. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
    5. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Environment; Social welfare; Asymmetries;
    All these keywords.

    JEL classification:

    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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