The Objective of an Environmental Regulatory Agency

Geum Soo Kim and William Neilson
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Geum Soo Kim: Hoseo University

Korean Economic Review, 2001, vol. 17, 393-400

Abstract: The objective of an environmental regulatory agency in charge of enforcing an environmental standard is studied. It is assumed that the standard and the agency's budget are set by an overseeing authority. It is found that depending on the standard and the budget given to the agency, the agency may or may not behave as if it minimizes noncompliance, even though its true objective is to maximize total profit minus damages. It is also shown that when the higher level agency sets the standard and enforcement budget to maximize social welfare, the agency acts as if it minimizes noncompliance.

Keywords: Environmental regulation; enforcement; pollution standards (search for similar items in EconPapers)
JEL-codes: K42 L51 Q28 (search for similar items in EconPapers)
Date: 2001
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