Voluntary Environmental Agreements when Regulatory Capacity Is Weak

Allen Blackman, Thomas Lyon () and Nicholas Sisto

RFF Working Paper Series from Resources for the Future

Abstract: Voluntary agreements (VAs) negotiated between environmental regulators and industry are increasingly popular. However, little is known about whether they are likely to be effective in developing and transition countries, where local and federal environmental regulatory capacity is typically weak. We develop a dynamic theoretical model to examine the effect of VAs on investment in regulatory infrastructure and pollution abatement in such countries. We find that under certain conditions, VAs can improve welfare by generating more private-sector investment in pollution control and more public-sector investment in regulatory capacity than the status quo.

Keywords: voluntary environmental regulation; developing country (search for similar items in EconPapers)
JEL-codes: C72 O13 Q28 (search for similar items in EconPapers)
Date: 2006-07-03
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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