Precipice Regulations and Perverse Incentives: Comparing Historic Preservation Designation and Endangered Species Listing
51 Pages Posted: 10 Jul 2015
Date Written: 2015
The insight upon which this article is built is that the common structures of these two legal regimes create incentives toward destroying the resources they seek to protect. The shift from legal freedom to exploit resources to strict limitation on property modification and the lengthy and public process to designate or list specific resources for protection provide the motive and the opportunity to legally frustrate the application of the statutes. This article seeks to understand how these perverse incentives are created and how they can be lessened. The procedural and substantive provisions of both legal regimes have evolved to reduce the perverse incentives created by the formal precipice character of the regulatory structure.
Part I describes each regulatory regime and specifies the ways the regimes create incentives to destroy the resources they aim to protect. Part I also reviews the literature identifying such perverse incentives and what is known about the incidence of actual destruction. Part II addresses actual and suggested changes to the procedures for designation or listing the resources, while Part III looks at substantive changes in the laws that may have the purpose or effect of moderating negative incentives. Finally, part IV concludes by considering the extent to which accommodation reforms further, or compromise, the values that historic preservation and biodiversity laws advance.
Keywords: historic preservation designation, Endangered Species Act, Takings Clause, endangered species listing
JEL Classification: K00, K30, K39
Suggested Citation: Suggested Citation