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Abstract
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.