The environmental protection authority as a monopoly

Leon Taylor ()

Public Economics from EconWPA

Abstract: Small jurisdictions vie for economic development by relaxing pollution controls. This can cause damaging spillovers. Many policy analysts recommend replacing the small jurisdictions with a single authority that taxes development. But as the sole producer of development rights to a unique area, the authority will permit less development than is Pareto- efficient. Whether it can sustain monopoly power depends upon the form of its tax on development. Periodic taxes (such as annual property taxes) will sustain market power longer than will onetime taxes (such as those on transfer of ownership). Rather than create a monopoly, one can create an authority that taxes small jurisdictions for spillovers but otherwise lets them compete

Keywords: land use; environmental protection (search for similar items in EconPapers)
JEL-codes: R52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-env and nep-pub
Date: 1998-10-20
Note: Type of Document - LaTex; prepared on IBM PC ; to print on HP;
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:9810007

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