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Environmental Regulation with Optimal Monitoring and Enforcement

Author

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  • Hans W. Gottinger

    (University of Maastricht and CSEF, University of Salerno)

Abstract

We derive a set of optimal environmental regulations in the presence of asymmetric information about pollution abatement costs, where compliance may have to be induced through appropriate monitoring and enforcement measures. The regulator commits to monitoring of compliance with incentive compatible environmental regulations. The regulator can reveal regulations to achieve the objective of choosing the given abatement level, by proposing a menu of regulatory contracts that specify abatement levels.

Suggested Citation

  • Hans W. Gottinger, 2000. "Environmental Regulation with Optimal Monitoring and Enforcement," CSEF Working Papers 49, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:49
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    File URL: http://www.csef.it/WP/wp49.pdf
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    References listed on IDEAS

    as
    1. Baron, David P., 1989. "Design of regulatory mechanisms and institutions," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 24, pages 1347-1447, Elsevier.
    2. Swierzbinski Joseph E., 1994. "Guilty until Proven Innocent-Regulation with Costly and Limited Enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 127-146, September.
    3. David P. Baron & David Besanko, 1984. "Regulation, Asymmetric Information, and Auditing," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 447-470, Winter.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Environmental Regulation; Asymmetric Information; Incentive Compatibility; Monitoring;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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