The Use of Economic Incentives in Developing Countries: Lessons from International Experience with Industrial Air Pollution

By Allen Blackman, W. Harrington. 2000

164 citations recorded by the source corpus.

To what extent should developing countries eschew conventional command and control regulation that is increasingly seen as inefficient and rely instead on economic incentives to control industrial air pollution? The article discusses the advantages and disadvantages of various economic incentive instruments; presents in-depth case studies of their application in Sweden, the United States, China, and Poland; and proposes policy guidelines. The authors argue that both design deficiencies and pervasive constraints on monitoring and enforcement impede the effectiveness of economic instruments in developing countries. The latter are difficult to rectify, at least in the medium term. Therefore, tradable permits are generally not practical. Suitably modified, however, emissions fee policies probably are appropriate. They can provide a foundation for a transition to an effective economic incentive system and can raise revenue for environmental projects and programs. If political opposition can be overcome, taxes on goods associated with pollution constitute a second-best regulatory instrument.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/7382ef3f68bf837ae46817c4d4c6b88b400e9c3c

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In Economics and Econometrics

1. Rongbing Huang
2. R. Stavins
3. Danping Chen
4. Juan-Pablo Montero
5. Jesse D. Jenkins
6. P. Lehmann
7. Richard G. Newell
8. David Popp

In Strategy and Management

1. Rongbing Huang
2. R. Stavins
3. Danping Chen
4. Özde Öztekin
5. F. Li

Citations in the corpus

• Experience with Market-Based Environmental Policy Instruments (2002, background): “France, Italy, Sweden, and Galicia tax nitrogen oxide emissions, but only the Swedish tax has reduced emissions (Blackman and Harrington 1999).”
• Does Environmental Information Disclosure Benefit Waste Discharge Reduction? Evidence from China (2014, background): “Developing countries face more problems in using market-based tools than industrialized countries because of institutional environment and political relationships (Blackman and Harrington 2000).”