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Private vs. Public Regulation: Political Economy of the International Environment

Minimum standards set by a ‘World Environmental Organisation’ (WEO) and NGO labelling are promoted as alternative approaches to international environmental protection. We explore the potential inter-play between these two approaches when the WEO is subject to pressure from producers. We find that if WEO and NGO schemes are mutually exclusive then the existence of an NGO ‘alternative’ increases industry resistance to WEO proposals and this may reduce welfare. If, however, the schemes are run in parallel, existence of the NGO lessens producer opposition to WEO activities. This allows the WEO to be ‘bolder’ in its proposals, which is good for welfare.

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Paper provided by Department of Economics, Royal Holloway University of London in its series Royal Holloway, University of London: Discussion Papers in Economics with number 03/5.

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Length: 36 pages
Date of creation: Dec 2003
Date of revision: Dec 2003
Handle: RePEc:hol:holodi:0305
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  1. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
  2. Heyes, Anthony G., 1997. "Environmental Regulation by Private Contest," Journal of Public Economics, Elsevier, vol. 63(3), pages 407-428, February.
  3. Tracy R. Lewis, 1996. "Protecting the Environment When Costs and Benefits Are Privately Known," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 819-847, Winter.
  4. Lyon, Thomas P. & Maxwell, John W., 2003. "Self-regulation, taxation and public voluntary environmental agreements," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1453-1486, August.
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