escaping the polluter pays trap financing wastewater treatment on the tijuana san diego border abstract building and operating infrastructure to address transboundary environmental hazards requires dividing the cost of pollution prevention between bordering states when cost burden questions arise the solution often suggested is the polluter pays principle ppp however when political and economic relations between neighboring countries are asymmetrical other cost burden principles are often adopted given the discrepancy between theory and practice the aim of this study is to identify some of the available cost burden principles and to examine when they might replace the ppp the pollution prevention regime along the san diego tijuana border is used as a case study it was found that under asymmetrical relations there are several competing cost burden principles some principles are adopted since they are perceived by some to be fair while others are adopted since they provide effective wastewater treatment the ones that were found effective are those that offset to some degree existing asymmetries this explains why the ppp was replaced in the san diego tijuana case with other cost burden principles that better offset the asymmetries and thus they provided a more effective wastewater treatment than the ppp

debt for nature swaps overview and discussion of key issues abstract debt for nature swaps involve the purchase of a developing country s debt at a discounted value in the secondary debt market and cancelling the debt in return for environment related action on the part of the debtor nation the present debt situation of many dcs possessing tropical forests is seen as an opportunity to trade off bad debts against habitat preservation as long as the amounts at stake are marginal relative to a country s debt burden arrangements such as debt for nature swaps may prove beneficial because the opportunity costs of the freed funds are very low once such swaps take place on a larger scale however additionality may no longer be that obvious to the debtor government perhaps the most important contribution of aggressive promotion of such swaps will be awakening of policy and decision makers to the many consequences of accelerating environmental degradation of many unique and fragile tropical habitats along with an increased awareness of the increasing opportunity cost of diminishing renewable resources such an awakening may in turn lead to a changed political climate for environmental management in general and an increased scope for international cooperation

buying cooperation in an asymmetric environmental differential game abstract we consider a two player asymmetric differential game of pollution control one player is non vulnerable to pollution or unwilling to consider damages when choosing her production policy in a non cooperative game we characterize the feedback nash equilibrium and the cooperative solution we establish conditions under which the vulnerable player can buy the cooperation of the non vulnerable player to control her emissions we further use the nash bargaining solution to allocate the total cooperative dividend between the two players and propose a time consistent decomposition overtime of the total payoff

negotiating an agreement on global warming a theoretical analysis abstract the outcome of international negotiation on combatting global warming is derived and analyzed using a two country bargaining model it is shown that while side payments between countries will generally be part of an agreement some of these payments are made purely as a result of asymmetry in bargaining power and have nothing to do with the polluter pays principle or the victim pays principle factors affecting the outcome of negotiation include a country s size of population the welfare level at the disagreement point and the order of making offers the enforcement issue is also discussed

the impact of foreign trade distortions on the social discount rate the official 10 per cent figure for the social discount rate for canada includes a foreign trade distortion equal to 4 per cent of the value of the income from private investment that gets displaced by additional public sector borrowing this paper finds evidence that any displacement of private investment by additional public sector borrowing will expand rather than contract the volume of trade because imports are substantially closer substitutes for the services of domestic capital than the services of domestic labour the official social discount rate appears to be overstated by approximately 0 5 percentage points owing to an incorrect accounting for the impact of foreign trade distortions l impact des distorsions dans le commerce international sur le taux d escompte social le chiffre officiel de 10 pourcent pour le taux d escompte social au canada contient une distorsion attribuable au commerce international 6gale a 4 pourcent de la valeur du revenu en provenance de l investissement priv6 qui est d6plac6 par l emprunt additionnel du secteur public ce m6moire suggere que tout d6placement de l investissement priv6 par des emprunts additionnels du secteur public va tendre a accroitre plutot qu a r6duire le volume du commerce parce que les importations sont des substituts plus importants des services de capital domestique que des services de travail domestique le taux officiel d escompte social semble etre surestime par 0 5 pourcent a cause d une comptabilit6 d6fectueuse de l impact des distorsions du commerce international

inconsistent preferences in environmental protection investment and the central government s optimal policy environmental protection plans cannot succeed without full cooperation among related units however inconsistent investment preferences toward environmental protection increase the damage to the environment this article employs the contract mechanism to analyse environmental protection effects when the central government directly subsidizes the local governments the results reveal that subsidies from the central government are not only unable to solve the problem of the inconsistent investment preferences among the central and local governments but also induce the free riding behaviour of local governments because of the free riding behaviour of the local governments there is no such equilibrium in which the central government prefers the sequential investment mode while the local governments prefer the simultaneous investment mode

optimal acid rain abatement policy for europe an analysis for the year 2000 acid rain causes greater environment damage than would occur if countries act cooperatively based on new estimates of sulphur abatement cost functions the potential gains from cooperation are calculated for europe various cooperative abatement rates are compared with the rates implied by recent international agreements the 30 club and the second sulphur protocol it is shown that the monetary gains from cooperation may be smaller than previously thought the distinction is made between primary and secondary abatement and their respective roles are discussed it is shown that agreed targets can only be met if primary measures eg fuel switching are adopted

why federal workers don t quit quit rates in the federal government are abnormally low some economists and the federal government itself have taken this to mean that federal wages are too high this paper provides an alternative explanation it shows that the timing of compensation across a career as well as its level affect quit rates pensions in particular impose large penalties on workers who quit early and the portion of federal pay in the form of pensions is very high this feature of the federal pay structure may explain its abnormally low quit rate as a general proposition quit rates are poor indices for judging pay adequacy

sulphur abatement policy this paper compares the cost of meeting pollution targets by the imposition of a uniform charge rate and by differentiated charge rates these costs are then compared with a simple standards setting in the form of critical loads in order to see in an empirical way if economic instruments work better than regulations empirical results are provided with associated conclusions and policy implications

international trade and environmental quality a survey abstract international trade has been incorporating various aspects of environmental issues since 1970 the extent to which environmental problems might affect many facets of trade or vice versa has been the subject of considerable debate over these years in this article we have attempted to establish some of the links between international trade and environmental quality by performing a comprehensive literature review we discuss issues such as establishing direct and indirect effects of international trade on environmental quality effects of trade on economic development environmental quality and energy and their relation with each other and finally the role of governments and international organizations in this context studies have so far revealed some linkages between trade and environment through conventional trade theory however interactions between international trade and types of pollution their sink and assimilative capacity need to be analyzed using a general equilibrium approach currently very little knowledge and agreement on the nature of interactions between trade theories development process and environmental quality exist existing studies have shown that the structure of environmental regulations should be modified to reflect the existence of trade under imperfect competition therefore further research on the interaction between new trade theory and environmental regulation is needed also theoretical and quantitative analysis regarding the effects of environmental regulations on competitiveness and location decision is needed the intensity and type of environmental measures vary across issues and countries therefore harmonizing environmental measures creates an inefficient atmosphere and to assume that trade restrictions will either improve or reverse the environmental damages is a serious mistake given the dynamic and intricate nature of the problem trade and environment debate continues despite vast research and poses a challenge for researchers and policy makers in the foreseeable future

the assessment the european internal market the next steps the treaty of rome envisaged the creation of the common internal market between the member states of the european community progress to wards this goal has been slow punctuated by sudden bursts of activity after the expiry of the deadline for the 1992 programme 1993 may mark the beginning of a prolonged pause or it may provide the impetus towards full economic mon etary and political integration at the time of writing the treaty on european union the maas tricht treaty the product of the french initiative to bind a unified germany into the european economy has not yet been ratified in all ec member coun tries the second danish referendum is outstand ing as is completion of the ratification process in the ukparliament the exchange rate mechanism erm has come under severe pressure with the suspension of uk membership and a series of devaluations in short monetary integration ac cording to the delors programme seems more remote now than at any time since the uk joined the erm stage n is extremely unlikely to begin on 1 january 1994 2 the main cause of these difficulties has been german reunification high german inter est rates have not only undermined currency pari ties they have also exacerbated recession across the community this shock to the european commu nity will take several years more to work through

brazilian policies that encourage deforestation in the amazon this paper shows that general tax policies special tax incentives the rules of land allocation and the agricultural credit system all accelerate deforestation in the amazon these policies increase the size of land holdings and reduce the chances of the poor to become farmers the following are the key provisions i the virtual exemption of agricultural income from income taxation makes agriculture a tax shelter ii rules of public land allocation provide incentives for deforestation because the rules used in determining the security of a claim and its land area encourage land clearing iii the progressive land tax contains provisions that encourage the conversion of forest to crop land or pasture iv the tax credit scheme aimed toward corporate livestock ranches subsidizes inefficient ranches established on cleared forest land and v subsidized credit is available for sudam approved ranches

agency growth salaries and the protected bureaucrat agency growth salaries and the protected bureaucrat i introduction in recent years increased attention has been directed towards understanding bureaucratic behavior and its implications for economic performance a key element of this literature is the application of utility maximization for deriving implications about bureaucratic behavior representative is niskanen 1971 38 who argues that bureaucratic decisions are made rationally to maximize utility which is assumed to be a function of salary perquisites reputation power patronage and output implicit in the literature is an activist bureaucracy which engages in purposeful action to advance its interests an important part of some of the bureaucracy literature is the notion that government employees are a source of the documented growth of government it is commonly asserted that government employees acting in their own self interest will foster the growth of their organization growth of the organization is seen as a means for increasing salaries as well as the other arguments in the utility function the positive link between salaries and growth is emphasized by downs 1967 11 in his classic study of bureaucracy any organization experiencing rapid overall growth provides many more opportunities for promotion in any given time period than a static one additional references to the importance of agency growth for salaries include niskanen 1971 38 41 1975 619 tullock 1974 127 and heclo 1977 131 building on that theme other researchers such as bush and denzau 1977 borcherding bush and spann 1977 and bennett and orzechowski 1983 have argued that government employees will use their power to influence election outcomes to promote government growth and hence salaries despite the often critical nature of the salary growth relationship in recent discussions of bureaucratic behavior and the growth of government there is no direct empirical evidence of the asserted linkage related evidence provided for example by wolfinger and rosenstone 1980 97 101 that government employees have higher voter participation rates than do private employees is not conclusive support for the growth salary assertion voting results alone do not permit one to distinguish the underlying reasons for the higher participation rates and there are many more importantly for the federal government at least the assertion that salaries of government employees are significantly affected by agency growth seems inconsistent with the idea that the civil service system shields federal white collar employees from the uncertain fluctuations of political outcomes skepticism about the growth salary linkage due to the constraints of the civil service system is noted by wilson 1980 375 few officials need fear for their jobs and their salaries are determined by government wide laws and regulations rather than by the size rate of growth or success of the organization further while senior agency officials would be in the best positions to promote the growth of their agencies within the federal government the salaries of high gs general schedule level and senior executive service personnel are capped by law and may not exceed those paid to officials in executive level v the restriction limits the salaries of senior managers regardless of the growth of the agency one could however argue that managers promote growth to motivate their subordinates or that medium and lower level employees are the primary proponents of agency growth but as kaufman 1981 79 notes most officers and employees once they have attained career status could do nearly as well materially without pushing themselves as they could by working at capacity the absence of incentives and resulting inertia can contribute to the often cited tension between career bureaucrats and political appointees the above discussion points out a serious problem with the growth salary linkage often asserted in the bureaucracy literature

electoral cycles and the earnings of federal bureaucrats this paper analyzes the relationship between the timing of federal elections and the pay raises received by civilian employees of the federal government the theoretical framework discusses how electoral wage cycles are generated as a result of optimizing behavior on the part of voters bureaucrats and the government the empirical analysis uses a time series of wage rates for the twenty eight largest federal agencies over the period 1961 1978 the study indicates that pay hikes during the presidential election year are significantly greater about 2 to 3 percent higher than bureaucratic pay raises in other years

predation by public enterprises abstract this paper demonstrates that in addition to the usual niskanen type losses generated by excess production by public firms there is an unrecognized second type of loss in order to sell their excess production public firms have to price their output below the competitive price and thereby cause more efficient firms at the margin to be eliminated the discussion is then extended to include the case where public enterprises finance additional expansions of output by price discriminating against inframarginal customers but then face the threat of competition for these inframarginal customers from new potential entry public enterprises are further shown to provide more credible threats to potential entrants since unlike private firms they value the increased output associated with predation and not merely the higher future benefits produced by it

do voluntary international environmental agreements work abstract we consider the effects of international environmental agreements using the 1988 sofia protocol on the reduction of nitrogen oxides panel data on 23 european countries for the period 1985 96 is used to evaluate the impact on emissions by dividing countries into participants and non participants that is those that did and those that did not ratify the sofia protocol using a difference in difference estimator and controlling for country specific variables we find that signing the treaty had a significant positive impact on emission reduction the estimated yearly reduction in emissions is approximately 2 1 greater than it would have been without the sofia protocol

optimal abatement of sulphur emissions in europe this study presents a mathematical model for determining cost effective emissions control strategies in europe by minimizing sulphur abatement costs subject to different pollution control targets the purpose is to compare the efficiency of a uniform percentage emissions reduction with a scenario that takes variation in environmental conditions into account underlying the proposed model is the belief that a full cost benefit analysis of acid rain abatement is infeasible the model focuses on the costs of abatement and provides an estimation of the gains or losses that countries could achieve if they co operate in their policies rather than act independently

determining the environmental effects of indirect subsidies integrated method and application to the netherlands the term environmentally damaging subsidies covers all sorts of direct and indirect subsidies with negative consequences for the environment this article presents a method to determine the environmental impact of these subsidies it combines a microeconomic framework with an environmental impact module the method is particularly useful for analysing indirect subsidies these are often hidden and therefore not recognized as subsidies use of the method will provide a basis for formulating corrective policy the method is applied to several important subsidies in the netherlands in agriculture energy and transport sectors the results reveal large environmental effects which deserve serious attention from policy makers to illustrate the specific features of the method its application to a particular subsidy namely the exemption of excise taxes on aviation fuels is presented in full detail

do government policies distort relative factor prices evidence from colombia developing countries have a variety of governmental and trade policies which are intended to affect the return to capital in an estimation of the return to capital in colombia an attempt is made to account for taxes both direct and indirect governmental subsidies and trade taxes and subsidies the economic income that accrues to colombia s capital stock is estimated by estimating the growth of the capital stock and the net cash flows generated by that capital additionally the average annual effective rate of protection to the manufacturing sector is estimated then using these effective rates of protection a test is made to determine if in fact protectionism affects the return to capital results reveal that there is a significant positive relationship between trade protection and the rate of return to capital in colombia furthermore support is found for a stopler samuelson effect of higher prices in the labourintensive agricultural sector leading to decline in the return for capital therefore

optimal control of upstream pollution under asymmetric information this paper derives optimal bribes to reduce upstream transfrontieremissions in the presence of asymmetric information on the polluter sconcern for the environment in a model in which the starting point forthe negotiations on emission reduction is a cournot nash equilibrium itis shown that transfers from the victim induce the polluting country toexaggerate its concern for the environment as a consequence in thesecond best solution abatement of all but the least caring type isdistorted downward and optimal bribes may be such that more caring typesturn them down these results are in sharp contrast to earlier policyproposals derived for a non equilibrium starting point they indicatethat under asymmetric information the binding incentive problem is toprevent the polluting country from claiming not to care about theenvironment and that optimal bribes from the victim should be restrictedto sufficiently environmentally concerned polluters

an iterative process for international negotiations on acid rain in northern europe using a general convex formulation this paper proposes a game theoretical approach of international negotiations on transboundary pollution this approach is distinguished by a discrete time formulation and by a suitable formulation of the local information assumption on cost and damage functions at each stage of the negotiation the parties assign the best possible cooperative state given the available information as an objective for the next stage it is shown that the resulting sequences of states converges from a non cooperative situation to an international optimum in a finite number of stages furthermore a financial transfer structure is also presented that makes the desired sequence of states individually rational and stategically stable the concepts are applied in a numerical simulation of the so2 transboundary pollution problem related to acid rain in northern europe

economic integration and the environment effects on members and non members the paper analyses the effects of economic integration and national environmental policies in a three country world there are two factors of production an environmental good and capital which is internationally mobile two of the countries create an internal market this is modelled by a reduction in mobility costs this process of economic integration leads to a relocation of the factors of production the welfare effects of factor relocation are analysed for different types of environmental policies special emphasis is placed on the issue of international externalities such as transboundary pollution spill overs

fringe benefits and labor mobility interindustry factor mobility is a crucial determinant of the income distribution effects of exogenous changes in relative commodity prices this examination of interindustry variation in wages and profits using data from manufacturing industries from

partial enclosure of the commons abstract we examine the efficiency distributional and environmental consequences of assigning spatial property rights to part of a spatially connected natural resource while the remainder is competed for by an open access fringe we refer to this as partial enclosure of the commons we obtain sharp analytical results regarding partial enclosure of the commons including 1 while second best it typically improves welfare relative to no property rights 2 all resource users can be made better off 3 positive rents arise in the open access area and 4 the resource maintains higher stocks under spatial heterogeneity we also characterize spatial regions that are ideal candidates for partial enclosure typically society should seek to enclose those patches with high environmental productivity and high self retention but whether high economic productivity promotes or relegates a patch may depend on one s objective

linear inequality methods to enforce partnerships under uncertainty an overview we review different generic conditions on stochastic outcome functions to enforce either efficient or nearly efficient partnerships their logical relationship is explored two kinds of conditions are considered however the property for an action profile to be compatible plays a crucial role in both kinds also two kinds of enforcement mechanisms are considered enforcement through utility transfers and enforcement through repetition

work incentives hierarchy and internal labor markets this paper argues that contracts with payment based on a ranking of employee performance can provide performance incentives even under asymmetric information that prevents payment based on individual performance only being enforceable such contracts also fit with five features of labor markets that have aroused considerable interest 1 hierarchical wage structures 2 internal promotion 3 wage rates that rise with seniority and experience more than productivity 4 the variance of earnings increasing with experience and 5 wage rates attached to jobs rather than individuals with differentials set by administrative procedures rather than by reference to external market wages

on international compensations for environmental stocks this paper sheds some light on the possible implications of compensations which are paid for the maintenance of an environmental stock it shows that serious complications can arise if the resource owner may influence the compensation price strategically if the incentive to raise the compensation price dominates the preservation incentive the steady state stock falls short from that which is voluntarily held whether compensation policies can neglect this feature depends crucially on the institutional setting which determines the compensation price

the voting behavior of bureaucrats some empirical evidence this paper has examined the voting behavior of bureaucrats and the consequences for elections the economic theory of the rational voter predicts that bureaucrats would have more to gain by voting than the general public the cost of voting is lower for public employees than for those who work in the private sector as a consequence theory predicts that bureaucrats would participate in elections at a greater rate than other individuals as a test of the validity of the economic theory of voting an empirical analysis of national elections from 1964 to 1978 was presented the evidence is drawn from household survey data published by the u s bureau of the census the data permit a direct observation of voting participation rates of public and private employees the empirical results indicate that bureaucrats consistently participate in elections at significantly greater rates than non bureaucrats as the public sector expands and voter participation rates remain low bureaucrats will exert disproportionate influence on election outcomes

theoretical foundations of negotiations and cost sharing in transfrontier pollution problems the negotiations model is described by a dynamic process bearing on a multilateral externality that converges to an individually rational pareto optimum the process embodies a cost sharing rule for pollutant abatement in the countries involved derived from a sharing rule of the surplus that is also shown to have strategic stability in the game theoretic sense of an imputation in the core of some cooperative game associated with the negotiation process the connections are explored between this cost sharing rule and the free rider problem in public goods theory

how powerful are public bureaucrats as voters empirical evidence is collected and discussed regarding the influence of public bureaucrats on government sector outcome in their capacity as consumer voters it is necessary to isolate the specific effect of working in the public sector compared to other occupations on voting participation and on the probability to support an increase in the public budget for a balanced evaluation of public bureaucrats power other forms of their influencing the government sector outcome need to be taken into account

international cooperation for sale abstract this paper shows that strong asymmetry among countries warrants a change in the rules of the game of global public goods provision with the consequence that cooperation by some countries is bought by others and aggregate welfare is increased perhaps substantially side payments on their own have virtually no effect on the outcomes that can be sustained by self enforcing cooperative agreements but when the rules of the game are changed by strong asymmetry when some countries are effectively committed to being non signatories to an agreement eschewing money transfers side payments become the vehicle for increasing participation in a cooperative agreement

bilateral transfers and lending in international environmental cooperation the paper analyzes environmental lending and transfers in a two country general equilibrium framework the lender country chooses specific environmental investments which it finances in the neighbour country on the basis of the returns they generate for the lender the gains from this kind of international environmental financing are illustrated with a numerical calibration of the model showing that the gains to the lender country may be fairly sizable in relation to the expenditure directed currently towards environmental protection these gains however essentially depend on the terms of the environmental financing we also find that debt for nature swaps do not in general produce efficient environmental protection if applied uniformly in international environmental financing

bretton woods blueprint for a greenhouse gas agreement abstract this paper describes the remarkable parallels between the problems faced in the drafting of the 1944 bretton woods agreement which established the rules and institutions governing the international financial system and the problems faced in drafting a greenhouse gas agreement the parallels include the need to induce countries to sacrifice economic sovereignty in order to provide a public good the need to facilitate capital investment and provide adjustment loans to be fair to developing versus developed nations to offer technical assistance monitor behavior punish offenders and promote a globally efficient allocation of resources it is claimed that between them the organizations which emerged from the bretton woods agreement namely the imf gatt and world bank have the necessary attributes of the needed global atmospheric control agency furthermore it is argued that there are striking parallels between the reserve accounts at the imf and the crediting and debiting of greenhouse gas emissions and absorptions between special drawing rights sdrs and rights for greenhouse gas emissions as well as in numerous other characteristics the paper concludes by noting that the almost half century of influence of the bretton woods institutions suggests we might borrow from their charters organizational designs membership incentives and procedures for adaptation and change

the co2 abatement game costs incentives and the enforceability of a sub global coalition abstract this paper studies the economic incentives and the institutional issues governing the outcomes of a short term climate change policy package guided by the united nations framework convention on climate change and the berlin mandate initiatives game theoretic tools and the global trade environment interface are explored within a 26 region 13 commodity computable general equilibrium framework to characterize the incentives of oecd regions to comply with a non binding agreement in a carbon abatement coalition the results showed that in the absence of side payments the achievement of such a coalition might require the design of suitable trade instruments

corruption and air pollution in europe this paper examines how the effectiveness of regulatory framework influences levels of sulphur emissions in a scenario where to reduce its emission tax payments a polluting firm may under report emissions level at the risk of being audited and fined first a model to explain how changes in regulatory framework e g audit effectiveness and transboundary spillovers affect both actual and reported emissions is developed then the theoretical predictions using data for 39 european countries from 1999 to 2003 are tested and inferences about true emission levels are made the empirical analysis supports the theoretical predictions with significant implications for the interpretation of pollution data reported to international monitoring agencies countries with effective regulation are likely to have relatively high reported emissions of sulphur but this should not automatically be interpreted as weak environmental performance because their actual pollution levels are likely to be lower than in nations with less effective regulation

optimal local taxation and french municipal tax distortions this article presents both theoretical and empirical findings in the field of optimal local taxation i e neutral in locational decision this topic should throw light on the question of tax policy and tax reform we extend wildasin s 1987 model including mobile capital in this way we include his marginal cost of congestion taxation rule relating to mobile households proposition 1 this extension provides us with a new rule proposition 2 the optimal share out of taxes among household residents and firms in municipalities to illustrate these results we discuss the french municipal tax system properties and we pick out its main distortions

agency costs in environmental not for profits we examine the behavior of not for profits using utility maximization this leads to testable hypotheses regarding the costs of agency associated with the activities of not for profits our tests are similar to those previously employed regarding not for profit objectives but our interpretation is different our empirical test uses data on environmental groups unlike previous studies biased toward a finding of service maximization we account for endogenous explanatory variables a weak statement of our results is that managers of environmental groups derive positive marginal utility from expenditures for purposes other than providing services there may also be empirical support for a stronger conclusion

an economic analysis of transboundary air pollution between finland and the former soviet union the net benefits of bilateral cooperation between finland and the former soviet union on reducing sulphur emissions are evaluated for both parties the analysis is based on a sulphur transportation model and on estimated abatement cost functions it is shown that efficient cooperation may entail financial transfers from finland to the soviet union

international environmental problems a simple taxonomy of international environmental problems is developed based on economic considerations the unidirectional externalities are illustrated by the case of one upstream and one downstream country the main problem in this case is an informational one the analysis of regional reciprocal externalities is illustrated by the acid rains in europe it is shown that an efficient solution could be achieved by transferable export rights finally global external problems are discussed with reference to greenhouse effects and extinction of species copyright 1990 by oxford university press

coalitions in transboundary pollution reduction during emission reductions countries render services to each other by reducing transboundary pollution which should be recognized as an additional source of benefit since transboundary pollution fluxes are often significant the underestimation of this factor can substantially affect the choice of emission reduction strategies and eventually restrain pollution reduction this factor is a specific feature of the transboundary pollution problem that in the taxonomy of m iler 1990 relates to the case of regional reciprocal externalities cooperation in the case of regional reciprocal externalities has been often studied explicitly or implicitly in terms of cooperative games with transferable utilities tu one reason for this is that within this approach side payments are allowed which theoretically give higher gains to participants as compared to the approach with non transferable utilities ntu another reason is that the theory of ntu games is not yet sufficiently developed as compared with the theory of tu games but the standard tu approach to regional environmental regulation shows significant drawbacks discussing the analyses of the canadian american agreement on the columbia river by krutilla 1966 1968 and of the mexican american agreement on the colorado river by kneese 1988 m iler 1990 points out that the countries do not use side payments in the explicit form moreover the amounts of implicit side payments seem to be in contradiction with the criteria of economic benefits producing an impression of irrationality of the countries choices mner 1990 in this paper the tu approach is abandoned in favour of the ntu approach to treat the case of regional reciprocal externalities from the viewpoint of the ntu game an irrational behaviour of a participant occurs when his preferences involve hidden goals while his implicit side payments favourably affect the other participants expected choices of strategies with respect to these hidden goals the ntu approach becomes immune to irrational behaviour if it allows consideration of the participants utilities reflecting their respective hidden goals through the above mechanism of transposed preferences non transferability of utilities generally means incommensurability of

are uniform solutions focal the case of international environmental agreements the application of uniform solutions has several drawbacks notably their lack of cost efficiency and their inability to guarantee individual rationality a proper specification of uniform solutions however reveals that uniform solutions that satisfy individual rationality always exist when all countries hold private information about their own reduction costs there only exists one solution that always satisfies individually rationality without use of side payments and the requirement of dominant strategy implementation the solution that selects the smallest individually preferred uniform reduction which also give a theoretical explanation of the lowest common denominator effect

maxium victim benefit a fair division process in transboundary pollution problems we introduce a side payment scheme maximum victim benefit that promotes stable international environmental agreements in developing this scheme we incorporate the equity position that victims of pollution should benefit from pollution control the result is a scheme which picks a unique element in the core it maximizes the benefits to the victims of pollution and ensures that polluters are willing to join the scheme

the role of economics in global management of whales re forming or re founding iwc abstract the global management of whale species identified as an economic mixed good is addressed by means of economic theory of bargaining and institution making i will analyse i why it is important to take into account explicitly both consumptive use and non use values within international conventions on global mixed goods ii the role and nature of institutions dealing with global issues iii the role of bargaining between conflicting interests as a focal feature of the institution making process and iv the role of economic thinking in international conventions co operative and non co operative solutions are discussed and instruments aimed at achieving co operative bargaining analysed the study has both positive and normative implications with insights on social welfare enhancing institutional reforms although the study is broad yet special focus is given to the international whaling commission iwc this paper concludes that we should make economic theory operational within the realm of global institutions on the basis of the bargaining model the conclusion is that iwc should necessarily be re founded or at least re formed changing the convention from whaling to a whale it is suggested that the possibility of introducing compensatory side payments into the bargaining arena in order to increase social welfare and enforceability with respect to a ban scenario be investigated ethical implications of monetary compensations are considered in parallel with economic efficiency the limits and potentialities of economics and economic instruments are also tested globally with respect to the whale and other environmental issues

public sector employee voter participation and salaries the hypothesis advanced by downs 1957 that rational utility maximizing citizens would calculate the benefits and costs of voting in deciding whether to vote often has been employed to argue that voter participation rates among government employees should exceed that of comparable private sector individuals the basic rationale for that prediction was laid out by downs 1957 254 who argued that those who stand the most to gain are the men who earn their incomes there higher voter participation rates for government employees coupled with an implied preference for the expansion of the public sector has also played a role in efforts to explain the growth of government borcherding bush and spann 1977 and bush and denzau 1977 in addition to benefiting from the supply of public goods and services as do all voters government employees are seen as benefiting from the expansion of government through an increase in their salaries in this paper the issue of voter participation rates for government employees is reexamined current population survey cps data tapes containing information on individual voter behavior for the 1984 and 1986 national elections are used to estimate a qualitative choice model 1 consistent with previous findings the results presented indicate that government employees as a group are more likely to vote than are private sector workers with similar socioeconomic and demographic characteristics wolfinger and rosenstone 1980 unlike previous studies however we distinguish between federal and state and local employees this distinction is important building on the downsian hypothesis that the cost and benefits of voting matter the arguments offered in the following section lead to the prediction that the probability of voting should be lower for federal employees than for state and local the empirical