Policy persistence in environmental regulation
Economics, Center for Agricultural and Rural Development
Journal or Book Title
Resource and Energy Economics
First Page or Article ID Number
We study the optimal emission standards under uncertain pollution damages and transaction costs associated with policy changes in a dynamic setting. We consider three alternative forms of transactions costs and show that they can lead to different kinds of delays of policy changes or smaller scales of these changes. Thus, policy persistence can be a rational response of forward-looking policy makers to future transaction costs, rather than an inefficient outcome of the current political process.
Zhao, Jinhua and Kling, Catherine, "Policy persistence in environmental regulation" (2003). Economics Publications. 147.