Subsidies! The Other Incentive‐Based Instrument: The Case of the Conservation Reserve Program
Economics, Center for Agricultural and Rural Development
Journal or Book Title
Moving to Markets in Environmental Regulation
This essay studies a very large and important example of an environmental subsidy program — the Conservation Reserve Program (CRP). The CRP was introduced in 1985. It investigates how much less efficient, if any, a command-and-control (CAC) form of regulation would have been. That is, it seeks to assess the policy as implemented relative to a fundamentally different form of regulation — CAC. It then studies the ex post performance of this incentive-based instrument. In so doing, it provides information on the degree to which market-based incentive programs, as they have actually been implemented, have or have not lived up to the original optimism with which economists viewed such instruments.
Feng, Hongli; Kling, Catherine L.; Kurkalova, Lyubov; and Secchi, Silvia, "Subsidies! The Other Incentive‐Based Instrument: The Case of the Conservation Reserve Program" (2006). Economics Publications. 551.