Political Economy of International Pollution

International pollution poses special problems for economic analysis. National governments can, in principle, be successful in improving environmental quality when the sources of pollution are located within the government's jurisdiction. This is not possible, however, when pollution originates abroad. In essence, the rules that govern transboundary pollution represent an international public good. Any solution to the problem requires international coordination and explicit recognition of both political and economic aspects involved. This paper presents a public choice model that captures the incentive structures faced by resource users and the marginal political and economic benefits and costs of regulation. Hypotheses derived and discussed concern the relative political strength of producers and consumers, transactions costs faced by each group, structure of the input market, relative size of the poHuting industries involved, level of economic development, and amount of the externality "exported" to or "imported" from other countries.

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 Record created 2017-04-01, last modified 2018-01-02

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