Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/44731
Authors: 
Year of Publication: 
2008
Series/Report no.: 
UFZ Discussion Paper No. 4/2008
Publisher: 
Helmholtz-Zentrum für Umweltforschung (UFZ), Leipzig
Abstract: 
This article provides a review of economic studies analyzing the use of multiple policies - a socalled policy mix - to cope with single pollution problems. To guide and structure the review, an analytical framework is developed and applied. The framework integrates transaction costs into the analysis of pollution problems and policies to overcome them. Moreover, it understands a pollution externality not only as a market failure but more generally as the failure of private governance structures. Based on this insight, two rationales for using a policy mix are identified. First, a policy mix may help to correct for multiple reinforcing failures of private governance structures, such as pollution externalities and technological spillovers. Second, a policy mix can be employed if the implementation of single first-best policies brings about high transaction costs - e.g., when marginal pollution damages are heterogeneous or polluters are unlikely to comply with the policy. For each rationale, the relevant literature is presented. Based on the review, avenues for future research are identified.
Subjects: 
policy mix
review
environmental policy
pollution control
externality
transaction costs
Coase
JEL: 
H23
Q53
Q54
Q58
Document Type: 
Working Paper

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