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Threshold Rules for Funding Environmental Mandates: Accountability and the Unfunded Mandate Reform Act

Author

Listed:
  • Thomas J. Miceli
  • Kathleen Segerson

Abstract

Unfunded mandates are orders imposed by higher level governments on lower-level governments without providing the funds necessary for implementation. We highlight the following trade-off associated with unfunded mandates: on the one hand, no funding creates a risk of over-regulation by the higher-level government (the accountability principle), but on the other, full funding creates a moral hazard problem whereby the lower-level government fails to minimize the cost of implementation. We examine threshold rules that simultaneously provide incentives for efficient decisions by both levels of government. We then apply the results to the Unfunded Mandate Reform Act.

Suggested Citation

  • Thomas J. Miceli & Kathleen Segerson, 1999. "Threshold Rules for Funding Environmental Mandates: Accountability and the Unfunded Mandate Reform Act," Land Economics, University of Wisconsin Press, vol. 75(3), pages 375-389.
    • Handle: RePEc:uwp:landec:v:75:y:1999:i:3:p:375-389
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    Cited by:

    1. Katarina Elofsson, 2011. "Delegation of Decision-Rights for Wetlands," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(2), pages 285-303, October.

    More about this item

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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