Compliance costs,regulation, and environmental performance: Controlling truck emissions in the US

When explaining regulatory policymaking and the behavior of regulated business firms, scholars have supplemented economic models by emphasizing the role of public‐regarding entrepreneurial politics and of normative pressures on firms. This article explores the limits of such entrepreneurial politics and “social license” pressures by examining regulation of emissions from diesel powered trucks in the US. We find that the economic cost of obtaining the best available control technology – new model lower emissions engines – has: (i) limited the stringency and coerciveness of direct regulation of vehicle owners and operators; (ii) dwarfed the reach and effectiveness of the governmental programs that subsidize the purchase of new less polluting vehicles; and (iii) elevated the importance of each company’s “economic license”– as opposed to its “social license”– in shaping its environmental performance. The prominence of this “regulatory compliance cost” variable in shaping both regulation and firm behavior, we conclude, is likely to recur in highly competitive markets, like trucking, that include many small firms that cannot readily either afford or pass on the cost of best available compliance technologies.     

Environmental Protection Versus Economic Development: A False Trade‐Off?

Is a trade‐off between the social benefits of regulation and the economic benefits of development inevitable? We argue that environmental regulation may deter economic growth in some contexts, however, in other contexts the benefits of regulation may be obtained with little or no economic loss. We develop an explanation of the economic impacts of state environmental policy based on a model of public influence on private resource allocation decisions. In this model, we assume utility‐maximizing firms will make investment choices based upon the projected profits on their investments and their willingness to accept the risk associated with the investments. We assert that state policies and administrative institutions influence perceptions of risk by increasing or decreasing uncertainty over future environmental policy and influence return on investments at particular locations by affecting firm‐level production costs. Our results confirm that certain administrative arrangements for environmental regulation may enhance, rather than impede, economic development.     

Businesses and the Internet: Implications for Firm Location and Clustering

This article discusses the economic and geographical implications of the growing use of information and communications technologies (ICTs) in the production process. In short, ICTs make internal and external communications more efficient and allow faster and more flexible interaction among different agents. These improvements correlate with changes in the internal organization of the business and in its strategic behavior. Those changes have implications for regional economic development.The four sections of the article include a typology of information and communications technologies and a discussion of how they diffuse; an elaboration of the concept of economic clusters and economic space in the context of ICTs; and a review of the methodological issues surrounding the development of virtual (rather than physical) clusters of economic activity.The article's, major insights include the following. Information-based, younger, and smaller businesses, and the service sector, benefit most from the Internet. Many of those businesses are integrated in networks and economic clusters; historically, they are often located in close spatial proximity to each other and/or to their customers. At the same time, a new type of virtual agglomeration is created for some type of activities through Internet interaction, which does not require physical proximity. The article stresses the need for a new paradigm to think about the relationship of business and space.     

Adversarialism versus legalism: Juridification and litigation in corporate governance reform

Recent reforms of corporate governance law and related litigation rules in the US and in Germany indicate that reports of the spread of adversarial legalism are greatly exaggerated. Politics and legislation in the US since the mid‐1990s have turned quite decisively against shareholder litigation even as corporate governance and securities law reforms have expanded the role and scope of the regulatory state. Germany's extraordinary expansion of financial and corporate governance regulation since the early 1990s exemplifies juridification. Although these reforms included some liberalization of shareholder litigation rules, the changes reflected skepticism towards private litigation and imposed new constraints on the most prevalent forms of shareholder suits. Marketization of economic relations and the era of finance capitalism have produced far more legalism than adversarialism, more regulation than judicialization, and more ex ante transparency rules than ex post litigation remedies.     

THE GROWNING INTERNATIONAL ACTIVITIES OF THE AMERICAN STATES1

This article examines state responses to the changing global economy, by exploring the growth of state international economic activities, variations in these activities, factors promoting and limiting state involvement in international affairs, and implications of these trends for the implementation of state economic development policies. Global economic competition, a changing domestic political and economic landscape, the modernization of state government, and increasingly open international markets have inspired states to increase their international activities. Consequently, dramatic growth in state international activities has occurred in the fields of trade promotion and economic development. Yet, state and local involvement in international affairs has not been universally accepted nor consistently funded.     

Local Economic Development: What is Proposed, What is Done, and What Difference Does it Make?

This paper assesses the comparative policy insights gained from the articles in the symposium in terms of three dimensions: policies proposed, actions taken, and impacts scored. Local economic development interventions are classified in terms of a five-way categorization in terms of geographic breadth of action and reliance on complementary private action as a prerequisite to lasting impact. The nine symposium cases are then examined for their evidence on development efforts' accountability to the public and lessons about efficient use of public funds. The paper concludes that the cases demonstrate that most development efforts have wasted public funds, offering at best the limited success resulting from efforts to beggar neighboring local economics with which competition for development continues.     

Competition and cooperative practices in Sino-Japanese energy and environmental relations: towards an energy security ‘risk community’?

Abstract

This article reexamines the conventional wisdom that characterizes Sino-Japanese energy relations as predominantly competitive, but views Sino-Japanese environmental relations as essentially cooperative. Using sociological theories of risk, it is argued that Sino-Japanese cooperation is more likely in both the energy and environmental areas when common risks are perceived and relative gains are minimized. Despite their many conflicting strategic, political, and economic interests, as energy importers who are vulnerable to supply interruptions in the Middle East and competitors for global energy supplies, China and Japan share common risks to their energy security. Consequently, there actually may be increasing opportunities for China and Japan to address their common concerns through bilateral and multilateral cooperative practices, such as common positions on pricing or energy conservation initiatives. Although one would expect China and Japan to highlight their mutual interests in tackling environmental problems such as air pollution, in fact relative gains often impede cooperation. Japan increasingly views China as an economic competitor and is reducing environmental aid, while China continues to set a priority on economic growth, which sets limits on the use of costlier Japanese green technologies. By examining a selection of scholarly articles, reports and newspaper articles by Chinese and Japanese analysts, as well as material from interviews in Beijing and Tokyo in May–June 2007, the paper shows how environmental and energy issues in Sino-Japanese relations may be framed as threats, requiring counter-measures, or common risks, which can be addressed through cooperative practices. Lastly, the paper discusses the possibility of the development of an energy security ‘risk community’ as cooperative practices develop between China and Japan. Nonetheless, conflicting political interests, strategies, and self-images, accentuating relative gains, may provide obstacles to their cooperation in both energy security and environmental protection.     

Stimulating ‘green’ technological innovation: An analysis of alternative policy mechanisms

As our understanding of human impacts on the environment has increased, it has become clear that we need to move toward a closed-loop industrial society in order to avoid undesirable health and ecosystem consequences. Achievement of this goal depends on radical technological innovation in both products and processes. This paper explores how to design public policy mechanisms to stimulate rather than impede pollution-preventing technological innovation. It begins with a discussion of the role of government in civilian technology development and diffusion. It then sets out six design criteria for policy to promote green technology innovation. Based on this set of design criteria, the article assesses the potential and limitations of current U.S. policy approaches to stimulate technological innovation that moves us toward a minimal waste society. The main conclusions of this assessment are as follows. Over the past decade, the U.S. environmental policy system has experienced a variety of reforms and new initiatives, many aimed directly at promoting environmentally-friendly technological change. The strengths of these reforms are to increase the information that the private sector has about the magnitude and cost of their environmental impacts and to allow greater flexibility in the technologies that firms choose to meet environmental regulations and goals. Because of these reforms, firms are likely to undertake technological innovation for the environment in situations with clear short-term economic benefits, i.e. to capture the much heralded win-win potential of environmental regulation. However, these reforms have significant weaknesses as well. Unless policy provides stronger political or economic incentives and clearer signals about future environmental performance requirements, we are unlikely to be able to drive technological innovation in industries where the pay-off is more longterm or uncertain, and thus will make only limited progress toward the goal of a minimal waste society.     

Regulatory Stringency, Green Production Offsets, and Organizations' Financial Performance

Some scholars have argued that environmental regulatory pressures constrain organizations' financial opportunities, while others maintain that environmental regulations can spur product and technology innovations and encourage greater operational efficiencies. Advocates on both sides have evidence in support of their positions. However, considering both perspectives in tandem and recognizing that other factors may be associated with improved financial performance, we may find that neither position is valid, or that both are. Relying on data for manufacturing facilities in seven countries, this study shows that more stringent environmental policy regimes are related to diminished firm profits. Yet organizations that are motivated by a green production focus—defined as enhancing internal efficiencies and new product and technology development—are more likely to improve their environmental performance. They also demonstrate a greater probability of benefiting financially, thereby offsetting the cost of regulation or accruing a net gain.     

REGULATION OF THE FREE-ADVERTISING AND THE FIRST AMENDMENT

The "new" line between communications that have full First Amendment protection and those that are subject to regulation is still in the process of being delineated by the Supreme Court; legal and mass a communication scholars are proposing a plethora of tests for future cases. Rather than proposing yet another test, this article starts from the premise that future advertising regulation cases will be based on legal philosophy and judicial "world view" as well as law and precedent. First Amendment law and advertising regulation concerns have historically been based on two different concerns and perspectives that have only recently been seen to interact. This article charts a perspective on the differences in the legal, philosophical and historical roots of these two areas, shows how and why they are now seen as interrelated and attempts to give some insight into possible future legal directions in this area.     

THE DISCIPLINE OF PUBLIC ADMINISTRATION AND THE STUDY OF LOCAL GOVERNMENT

No doubt my colleagues in this venture will attest to the wide range of contributions which Robert Parker and Dick Spann have made to the field of public administration. I have benefited greatly from these contributions, as well as from discussions with both, in particular from those with Dick Spann during my period in the Department of Government and Public Administration at the University of Sydney. However, the breadth of their coverage has not been without some cost to the field, and in this paper I want to examine their influence on the area which I know best, that of local government.     

REGULATION AND THE THEORY OF AGENCY1

The major arguments of this paper are that there is a need for an integrating framework for the study of regulation, including the design of regulatory institutions, and that the theory of agency may provide such a framework. The paper provides a brief overview of this approach. The theory of agency is a general theory of social relationships of “acting for” that is now under development in several disciplines, particularly economics and accounting. Regulation is seen as a generic relation observed widely in social behavior, and as a particular type of agency relationship. The problems of agency relations–e.g., the problems of principals in controlling agents and of agents in acting according to the principals' desires–have their counterparts in regulation.     

The GATT and Environmental Policy: An Analysis of Potential Conflicts and Policy Reforms

The emergence of a worldwide environmental movement in the early 1960s accompanied an international expansion of economic activity and applied technology. The principal medium through which this expansion progressed was trade. In 1947, following World War II, a series of international agreements were negotiated to regularize international relations in finance, monetary policies, and trade. The General Agreement on Tariffs and Trade (GATT) was negotiated without anticipation of an international environmental movement and new policies at the national level that did not reflect, and might be inconsistent with, economic values. Conflict between policies for freedom of trade and environmental protection did not immediately emerge. With the adoption of numerous environmental protection measures in the United States and many other countries after 1969, the incompatibility of some trade and environmental policies became political issues. Trade policies are not confined to economic changes. Policy issues developing around the agreement and environmental protection are complex, and frequently involve technological issues, as in the Mexican tuna controversy discussed in this paper.     

Development Ballot Measures, Interest Group Endorsements, and the Political Geography of Growth Preferences

In response to rapid population and economic growth, many communities have turned to voter initiatives to resolve their land use disputes. We find that despite strong public concern about growth, voters often support measures that allow or encourage new development. We consider the sources of this support by analyzing patterns of voting on a range of prodevelopment ballot initiatives. These initiatives provide a valuable opportunity to understand how economic self-interest, geography, interest group endorsements, and public goods affect citizen support for development policies. We find that interest group endorsements significantly increase public support for new development. These endorsements help voters evaluate the personal impact of complex development proposals and allow voters to behave in ways that reflect a high degree of sophistication .     

Environmental Justice and Information Technologies: Overcoming the Information-Access Paradox in Urban Communities

Scientific studies and resident testimony suggest that urban residents in low-income and minority communities have been subject to an unequal burden of environmental pollution and inequitable environmental enforcement practices. A key component of the equitable development and implementation of environmental policies is the participation of citizens and community-based organizations in the policy process. Such participation rests upon equitable access to agency-generated environmental information and effective use of that information by citizens. This article focuses on the adoption of Internet technologies by environmental agencies as a mechanism for disseminating information and the implications for low-income and minority residents in urban communities. A framework is developed to guide a programmatic response to overcome these implications. The results from several community-based projects are described and analyzed for their capacity-building effectiveness. Analysis of the projects indicates improvement in community capacity for information access and use, which bolstered community participation in the environmental decision-making process.     

LONG TERM CARE REGULATION IN THE STATES: A SYSTEMIC PERSPECTIVE

In recent years there has been growing interest in differing state roles in the regulation of the health care industry. Most of this attention has stressed the impact of regulatory policy with only superficial attention directed towards understanding the extent to which states can be counted on to act effectively in the area of health care regulation. Using the regulation of nursing homes as a focus, this study evaluates a variety of sociocultural, political, and economic conditions for their impact on the development of various regulatory policies. The findings suggest that the development of certificate of need legislation and reimbursement controls were not related to significant changes ir, states' budgets for Medicaid services or in bed/population ratios. Instead, regulatory efforts were more closely linked to the sociopolitical environments surrounding the policy arena. While these factors provide some indication of the potential for strong state action in the regulatory arena, ultimately the use of state regulatory policies will depend quite centrally on the innovative tendencies of the state, its organizational capacity for addressing policy issues, and the nature and extent of interest group politics.     

INSTITUTIONAL REFORM IN ENVIRONMENTAL GOVERNANCE SYSTEM OF THE PEOPLE'S REPUBLIC OF CHINA: Service Organizations as an Alternative for Administrative Enhancement

The economic reform in the PRC inaugurated by Deng Xiaoping in 1979 has changed the landscape of the regime's environmental governance by putting it in a more market‐oriented context. As a strategy to strengthen administrative capacity in a situation heavily circumscribed by the limited resource support from local governments, the environmental protection authorities at all levels have established a sizable number of service organizations to provide them administrative support. These service organizations have to sponsor their own operation by engaging in revenue‐generating or fund raising activities. This has led to the emergence and proliferation of service organizations in the environmental governance system in the last decade. This article will examine, from a state capacity perspective, institutional reform in the environmental governance system of the PRC¹.     

Partisan politics,welfare states,and environmental policy outputs in the OECD countries, 1975–2005

Building on the burgeoning literature on the association between the welfare state and the environmental state, this study empirically examines how the politics of the former has affected the development of the latter. We suggest that the size of the welfare state shapes the calculus of environmental policy costs by partisan governments. A generous welfare state lowers the costs perceived by the left‐wing government, as large redistributive spending allows the government to mitigate the adverse impact of the new environmental policy on its core supporters, industrial workers. A generous welfare state also implies diminished marginal political returns from additional welfare commitment by the left‐wing government, which lowers the opportunity costs of environmental policy expansion. To the contrary, because of lower overall regulatory and taxation pressure, a small welfare state reduces the costs of environmental policy expansion as perceived by a right‐wing government. Our theoretical narrative is supported in a dynamic panel data analysis of environmental policy outputs in 25 Organisation for Economic Co‐operation and Development member states during the period 1975–2005.     

THE DOCTRINE OF STRICT LIABILITY: AN ALTERNATIVE APPROACH TO CONSUMER PROTECTION REGULATION

Using a legal system of strict liability allowing contributory negligence as a valid defense provides an alternative to consumer protection regulation. In addition, the strict liability system allows rapid and responsive compensation to injured individuals. Corporate uncertainty as to future costs and business environment are substantially reduced, thus allowing firms to make accurate and rational long-term, strategic plans. This paper presents the basic functional constructs required for developing a viable regulatory framework using strict liability and then looks at an example where it could be employed. The scenario deals with an environmental pollution and protection problem. In the example, a strict liability system allowing for a defense of contributory negligence is shown to be conceptually more efficient and desirable than the existing regulatory system and negligence liability procedures.