Negotiation-based Policy Instruments and Performance: Dutch Covenants and Environmental Policy Outcomes

Numerous governments have adopted innovative policy instruments to deal with important environmental policy challenges and negotiated instruments offer the potential to improve performance beyond what regulation alone can accomplish. Dutch covenants, which represent negotiated agreements with sectors of industry as targets of behavioral change, provide useful evidence of the determinants of success. For improving environmental performance, certain features of the policy setting explain much of the variance in ambitions and outcomes: attitudes of decision makers in the affected businesses, attention to cost minimization, and possibly the degree of ambition built into the agreement. Modeling to explain the extent of ambition and compliance offer further insights. While some Dutch lessons may be restricted to more corporatist policy settings, others may help improve the effectiveness of negotiated agreements in many national settings.