Waste disposal and decentralisation: a welfare approach

Laura Levaggi (), Rosella Levaggi and Carmine Trecroci
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Laura Levaggi: Libera Università di Bolzano, Italy

Working papers from Società Italiana di Economia Pubblica

Abstract: Since the seminal work of Oates (1972) on scal federalism, a central question of public finance has been which level of a federation should be as- signed the provision of public goods. In this paper we study the problem of a government that is to choose the optimal centralization/decentralization mechanism for the final treatment of municipal solid waste. We analyze incentives, equilibria and implications of the governance framework for the disposal of waste. The key decisions revolve around the mobility of waste and the externalities (pollution) associated with its disposal, be it incineration or landfill. Moreover, if the Regions are characterized by different levels of efficiency in the processes they apply to the final treat- ment of waste, in theory a certain degree of waste mobility across regions should allow to reap the benefits of higher efficiency. On the other hand, as transportation and other environmental costs implied by mobility and concentration are significant, a trade-off emerges. Our model evaluates the implications of that trade-off for the optimal degree of decentralization in waste management.

Keywords: waste disposal; cross border shopping; decentralisation; welfare (search for similar items in EconPapers)
JEL-codes: D62 H70 Q20 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-env and nep-pbe
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