Evaluating the Performance of Environmental Policy: Contributions of Neoclassical, Public Choice, and Institutional Models

The contributions of neoclassical, public choice, and institutional models to the evaluation of alternative institutional structures are analyzed to determine the relevance and advantages of each school in evaluating environmental policy. The study shows that traditional neoclassical models are not designed for comparing alternative institutional structures. Neoclassical analysis takes place within the confines of a particular institutional setting. While public choice economists have made contributions to economics, none of those contributions pertains to evaluating new initial endowments. Public choice analyses are essentially identical to neoclassical analyses. Institutional models are found to be well-suited to evaluating environmental policy, although environmental impact statements can be faulted for institutionalized polarization, information misuse, and high decision-making costs.