When the government wants farmers to adopt a certain management practice on environmentally sensitive land, it can mandate adoption, with fines for noncompliance, or use a stewardship program, with incentives for those who comply. The Federal Agriculture Improvement Act of 1996 (FAIR) continues the tradition of voluntary programs. An analysis by the authors outlines the conditions under which these voluntary programs are more efficient than mandatory ones.
This working paper was published as Wu, JunJie and Bruce A. Babcock, "The Relative Efficiency of Voluntary vs Mandatory Environmental Regulations," Journal of Environmental Economics and Management 38 (1999): 158–175, doi:10.1006/jeem.1999.1075.
Wu, JunJie and Babcock, Bruce A., "The Relative Efficiency of Voluntary Versus Mandatory Environmental Regulations" (1996). CARD Working Papers. 181.