Abstract

http://ssrn.com/abstract=217211
 
 

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When is Command-and-Control Efficient? Institutions, Technology, and the Comparative Efficiency of Alternative Regulatory Regimes for Environmental Protection


Daniel H. Cole


Indiana University Maurer School of Law; Indiana University School of Public and Environmental Affairs; Indiana University Bloomington - Workshop in Political Theory and Policy Analysis

Peter Z. Grossman


Butler University - College of Business Administration


Wisconsin Law Review, Vol. 1999, Pp. 887-938, 1999

Abstract:     
Contrary to the conventional wisdom among economists and legal scholars, command-and-control (CAC) environmental regulations are not inherently inefficient or invariably less efficient than alternative "economic" instruments (EI). In fact, CAC regimes can be and have been efficient (producing net social benefits), even more efficient in some cases that alternative EI regimes.

Standard economic accounts of CAC are insensitive to the historical, technological, and institutional contexts that can influence (and sometimes determine) the efficiency of alternative regulatory regimes. A regime that is nominally or relatively efficient in one set of circumstances may be nominally or relatively inefficient in another. In some cases, given the marginal costs of pollution control, technological constraints, and existing institutions, CAC can be the most efficient means of achieving a society's environmental protection goals.

This paper reviews the empirical literature on environmental regulation and finds that CAC is not inherently inefficient or invariably less efficient that EI. In addition, the paper elaborates a model through five stylized cases, which demonstrate how alternative approaches to environmental regulation are more or less efficient depending on institutional and technological factors that affect overall regulatory costs. Finally, the model is empirically supported by a detailed history of the U.S. Clean Air Act's regulatory regime. Viewed as an evolutionary process, occurring within an institutional and technological framework, it was (nominally and relatively) efficient for Congress to rely, in the early years of federal air pollution control, on CAC regulations, and then in more recent years to begin experimenting with efficiency-enhancing EI.

JEL Classification: K2, N4, N5, 03, Q2

Accepted Paper Series


Not Available For Download

Date posted: March 13, 2000  

Suggested Citation

Cole, Daniel H. and Grossman, Peter Z., When is Command-and-Control Efficient? Institutions, Technology, and the Comparative Efficiency of Alternative Regulatory Regimes for Environmental Protection. Wisconsin Law Review, Vol. 1999, Pp. 887-938, 1999. Available at SSRN: http://ssrn.com/abstract=217211

Contact Information

Daniel H. Cole (Contact Author)
Indiana University Maurer School of Law ( email )
211 S. Indiana Avenue
Bloomington, IN 47405
United States
Indiana University School of Public and Environmental Affairs ( email )
1315 East Tenth Street
Bloomington, IN 47405
United States

Indiana University Bloomington - Workshop in Political Theory and Policy Analysis ( email )
Indiana University Bloomington
Bloomington, IN
United States
(812) 855-4421 (Phone)
Peter Z. Grossman
Butler University - College of Business Administration ( email )
Indianapolis, IN 46208
United States
317-940-9727 (Phone)
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