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Controlling industrial pollution : a new paradigm

  • Afsah, Shakeb
  • Laplante, Benoit
  • Wheeler, David
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    The authors call for a revised model for the regulation of industrial pollution. They think the traditional emphasis on appropriate instruments, while ultimately correct, is premature, because agencies in most developing countries have insufficient information and burdensome transaction costs to implement any instruments comprehensively. Once regulators have better information, more integrated information systems, more capacity for setting priorities, and a stronger public mandate, it will not be difficult for them to manage pollution more cost-effectively. Overhasty production of market-based instruments will not work and will probably discredit those regulatory tools. Rather, the new model of regulation should relegate regulators to their proper place in the scheme of things. The state should play a role in regulating pollution externalities, but should also recognize the role of the community and the market. In the authors'view, appropriate regulation in developing countries should incorporate five key features, namely, it should foster a climate of information intensity, encourage community environmental education, allow variations in regulations in different communities, initiate pilot projects and build larger programs later, and fashion adaptive regulatory instruments that both counter environmental degradation and minimize disruption for investors.

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    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1672.

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    Date of creation: 31 Oct 1996
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    Handle: RePEc:wbk:wbrwps:1672
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    1. Hamilton James T., 1995. "Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 98-113, January.
    2. Catherine Dion & Paul Lanoie & Benoit Laplante, 1996. "Monitoring of Pollution Regulation: Do Local Conditions Matter," CIRANO Working Papers 96s-33, CIRANO.
    3. Mary E. Deily & Wayne B. Gray, 1989. "Enforcement of pollution regulations in a declining industry," Working Paper 8912, Federal Reserve Bank of Cleveland.
    4. Hettige, Hemamala & Huq, Mainul & Pargal, Sheoli & Wheeler, David, 1996. "Determinants of pollution abatement in developing countries: Evidence from South and Southeast Asia," World Development, Elsevier, vol. 24(12), pages 1891-1904, December.
    5. Afsah, Shakeb & Laplante, Benoit & Makarim, Nabiel, 1996. "Program-based pollution control management : the Indonesian PROKASIH program," Policy Research Working Paper Series 1602, The World Bank.
    6. Hua Wang & Wheeler, David, 1996. "Pricing industrial pollution in China : an econometric analysis of the levy system," Policy Research Working Paper Series 1644, The World Bank.
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