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8. Self-Interest and Environmental Management

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  • Kenneth A. Oye
  • James H. Maxwell

Abstract

Based upon an empirical analysis of environmental cases, we argue that regulations work most effectively when they confer tangible benefits on the regulated. In what could be termed Stiglerian situations, the convergence of self-interest and the public's desire to improve the environment occurs almost naturally. Because those who are regulated lobby for and benefit from regulation and the costs are widely dispersed, these situations tend to be characterized by regulatory stability. In what could be termed Olsonian situations, regulatory benefits are diffused across the many, while regulatory costs are concentrated on the few. In these situations the relatively few clear losers will tend to mobilize against regulation with greater effectiveness than the many weakly motivated beneficiaries, resulting in a high degree of regulatory instability. Compensation can be used in Olsonian situations to create incentives that approximate those that occur naturally in Stiglerian situations.

Suggested Citation

  • Kenneth A. Oye & James H. Maxwell, 1994. "8. Self-Interest and Environmental Management," Journal of Theoretical Politics, , vol. 6(4), pages 593-624, October.
  • Handle: RePEc:sae:jothpo:v:6:y:1994:i:4:p:593-624
    DOI: 10.1177/0951692894006004008
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    References listed on IDEAS

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    1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    2. Michael O'Hare & Debra Sanderson, 1993. "Facility siting and compensation: Lessons from the Massachusetts experience," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 364-376.
    3. Donald E. Agthe, 1986. "Indemnity For Companies Adversely Affected By Environmental Regulation Changes," Review of Policy Research, Policy Studies Organization, vol. 6(1), pages 9-13, August.
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    Cited by:

    1. Nils Ohlendorf & Michael Jakob & Jan Christoph Minx & Carsten Schröder & Jan Christoph Steckel, 2018. "Distributional Impacts of Climate Mitigation Policies - a Meta-Analysis," Discussion Papers of DIW Berlin 1776, DIW Berlin, German Institute for Economic Research.
    2. Charles F. Sabel & David G. Victor, 2017. "Governing global problems under uncertainty: making bottom-up climate policy work," Climatic Change, Springer, vol. 144(1), pages 15-27, September.
    3. Alexander Ovodenko, 2016. "Governing Oligopolies: Global Regimes and Market Structure," Global Environmental Politics, MIT Press, vol. 16(3), pages 106-126, August.
    4. Gallemore, Caleb & Guisinger, Amy & Kruuse, Mikkel & Ruysschaert, Denis & Jespersen, Kristjan, 2018. "Escaping the “Teenage” Years: The Politics of Rigor and the Evolution of Private Environmental Standards," Ecological Economics, Elsevier, vol. 152(C), pages 76-87.
    5. Jonas Meckling, 2015. "Oppose, Support, or Hedge? Distributional Effects, Regulatory Pressure, and Business Strategy in Environmental Politics," Global Environmental Politics, MIT Press, vol. 15(2), pages 19-37, May.

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