Corruption, environmental regulation and market entry

The authors develop a simple analytical framework to study the welfare-maximizing environmental standards when market entry is endogenous and firms can circumvent regulation by bribing corrupt officials. Corruption changes the tradeoff in environmental policy. Corruption leads more polluting firms t...

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Veröffentlicht in:	Environment and development economics 2017-02, Vol.22 (1), p.66-83
Hauptverfasser:	Biswas, Amit K., Thum, Marcel
Format:	Artikel
Sprache:	eng
Schlagworte:	Bribery Compliance Control Corruption Corruption in government Costs Economics Emissions Enforcement Environmental policy Environmental protection Environmental regulations Fines & penalties Government Governments Market entry Markets Mathematical analysis Optimization Pollution Regulation Studies Tax rates Tradeoffs Welfare
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Beschreibung
Zusammenfassung:	The authors develop a simple analytical framework to study the welfare-maximizing environmental standards when market entry is endogenous and firms can circumvent regulation by bribing corrupt officials. Corruption changes the tradeoff in environmental policy. Corruption leads more polluting firms to enter into the market, which requires tighter environmental regulation. However, corruption also makes trading in some environmental protection for a marginally higher market entry optimal for the government.
ISSN:	1355-770X 1469-4395
DOI:	10.1017/S1355770X16000218