IDEAS home Printed from https://ideas.repec.org/a/bla/jpbect/v7y2005i3p383-403.html
   My bibliography  Save this article

Inefficient Local Regulation of Local Externalities

Author

Listed:
  • GREGORY BESHAROV
  • ARI ZWEIMAN

Abstract

The consequences of commitment failure have been missing from debates about the decentralized regulation of automobile emissions and other sources of local consumption externalities. Even when the direct external effects of such products are limited to a single jurisdiction, the presence of increasing returns‐to‐scale production causes one jurisdiction's choice of regulatory standard to affect the prices and availability of goods elsewhere. Decentralized regulatory equilibria may be inefficient as a result. Because of a commitment failure, production may be split between standards—and consumers denied the full range of products—when it is efficient to have standards that allow products to be consumed everywhere. Coordination failures may cause similar inefficiencies. The results question the usefulness of the principle of subsidiarity as commonly employed.

Suggested Citation

  • Gregory Besharov & Ari Zweiman, 2005. "Inefficient Local Regulation of Local Externalities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(3), pages 383-403, August.
    • Handle: RePEc:bla:jpbect:v:7:y:2005:i:3:p:383-403
    DOI: 10.1111/j.1467-9779.2005.00209.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-9779.2005.00209.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-9779.2005.00209.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Wallace E. Oates & Wallace E. Oates, 2004. "A Reconsideration of Environmental Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 7, pages 125-156, Edward Elgar Publishing.
    2. Besharov, Gregory, 2001. "Influence Costs in the Provision of Local Public Goods," Working Papers 01-02, Duke University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lawrence W C Lai & Connie W Y Hung, 2008. "The Inner Logic of the Coase Theorem and a Coasian Planning Research Agenda," Environment and Planning B, , vol. 35(2), pages 207-226, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sigman, Hilary, 2003. "Letting States Do the Dirty Work: State Responsibility for Federal Environmental Regulation," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(1), pages 107-122, March.
    2. Fabio Fiorillo & Agnese Sacchi, 2012. "The Political Economy of the Standard Level of Services: The Role of Income Distribution," CESifo Working Paper Series 3696, CESifo.
    3. Levinson, Arik, 2003. "Environmental Regulatory Competition: A Status Report and Some New Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(1), pages 91-106, March.
    4. François Bareille & Matteo Zavalloni, 2020. "Decentralisation of agri-environmental policy design," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(4), pages 1502-1530.
    5. Williams, Roberton C., 2012. "Growing state–federal conflicts in environmental policy: The role of market-based regulation," Journal of Public Economics, Elsevier, vol. 96(11), pages 1092-1099.
    6. William M. Shobe & Dallas Burtraw, 2012. "Rethinking Environmental Federalism In A Warming World," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-33.
    7. Birner, Regina & Linacre, Nicholas A., 2008. "Designing Regional Systems of Biotechnology Regulation A Transaction Cost Approach to Regulatory Governance," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52218, African Association of Agricultural Economists (AAAE).
    8. Sonia Schwartz & Johanna Choumert-Nkolo & Jean-Louis Combes & Pascale Combes Motel & Éric Nazindigouba Kere, 2019. "On the optimal setting of protected areas," Working Papers halshs-02082753, HAL.
    9. Pierre Dupraz & Hervé Guyomard, 2019. "Environment and Climate in the Common Agricultural Policy," EuroChoices, The Agricultural Economics Society, vol. 18(1), pages 18-25, April.
    10. Yu Qi & Jinliang Yu, 2023. "Decentralization and local pollution activities: New quasi evidence from China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 115-159, January.
    11. Birner, Regina & Linacre, Nicholas, 2008. "Regional biotechnology regulations: Design options and implications for good governance," IFPRI discussion papers 753, International Food Policy Research Institute (IFPRI).
    12. Shyam Nath & Yeti Nisha Madhoo, 2021. "Environmental fiscal federalism and atmospheric pollution: A tale of two Indian cities," ASARC Working Papers 2021-01, The Australian National University, Australia South Asia Research Centre.
    13. Ando, Amy Whritenour, 2007. "Examples and Principles of State-Level Rural Environmental Initiatives," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(1), pages 1-3.
    14. Megan H. Accordino & Deepak Rajagopal, 2015. "When a National Cap-and-Trade Policy with a Carve-out Provision May Be Preferable to a National CO2 Tax," The Energy Journal, , vol. 36(3), pages 189-208, July.
    15. Böhringer, Christoph & Rivers, Nicholas & Yonezawa, Hidemichi, 2016. "Vertical fiscal externalities and the environment," Journal of Environmental Economics and Management, Elsevier, vol. 77(C), pages 51-74.
    16. Campante, Filipe R. & Ferreira, Francisco H.G., 2007. "Inefficient lobbying, populism and oligarchy," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 993-1021, June.
    17. Khaja Moinuddin, 2012. "The Provision of Regional Public Goods in South Asia," Chapters, in: Sultan Hafeez Rahman & Sridhar Khatri & Hans-Peter Brunner (ed.), Regional Integration and Economic Development in South Asia, chapter 7, Edward Elgar Publishing.
    18. Weibing Li & Yongwen Yang, 2024. "The effect of environmental centralisation on productivity: Evidence from an administrative reform in China," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 824-851, March.
    19. Lizhi Cui & Yining Ding & Xiangqian Li, 2022. "Environmental Regulation Competition and Carbon Emissions," IJERPH, MDPI, vol. 20(1), pages 1-28, December.
    20. Oliver Schöttker & Frank Wätzold, 2022. "Climate Change and the Cost-Effective Governance Mode for Biodiversity Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(2), pages 409-436, June.

    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jpbect:v:7:y:2005:i:3:p:383-403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/apettea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.