Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154787
Authors: 
Gêarn Hansen, Lars
Year of Publication: 
1997
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 23.1997
Abstract: 
Voluntary agreements with polluting industries are becoming a popular alternative to traditional environmental regulation. One reason may be that voluntary agreements can reduce compliance costs of polluting industries. In this paper we develop a family of simple policy formulation and implementation models enabling us to formally characterize the policy environments that make voluntary agreements possible. The main message of this paper is one of caution. Voluntary agreements that increase compliance costs and reduce social welfare cannot be ruled out. The analysis also suggests that giving the legislative branch of government an effective power of veto reduces (but does not eliminate) the possibility of welfare reducing voluntary agreements.
Document Type: 
Working Paper

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