With only two weeks to go until the start of the conference, we’re excited to release the abstract for the first of our invited papers, James Alm and H. Spencer Banzhaf’s “Designing Economics Instruments for the Environment in a Decentralised Fiscal System“:
When external effects are important, markets will be inefficient, and economists have considered several broad classes of economic instruments to correct these inefficiencies. However, the standard economic analysis has tended to take the region, and the government, as a given; that is, this work has neglected important distinctions and interactions between the geographic scope of different pollutants, the enforcement authority of various levels of government, and the fiscal responsibilities of the various levels of government. It typically ignores the possibility that the externality may be created and addressed by local governments, and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems. This paper examines the implications of decentralization for the design of corrective policies; that is, how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services and to choose tax instruments that can both finance these expenditures and correct the market failures of externalities?
The full paper and invited responses will be released on the first day of the conference, Wednesday 16 November, and all conference delegates will have the opportunity to engage in discussion of the topics raised. Over the coming weeks we will be releasing further abstracts and other “teaser content”, so be sure to register and sign up for email alerts or RSS feed to the right.