The Political Economy of Environmental Policy: A Public Choice Approach to Market Instruments.

• Author: CORDATO, ROY E.
• Position: Review

* The Political Economy of Environmental Policy: A Public Choice Approach to Market Instruments By Bouwe R. Dijkstra Northampton, Mass.: Edward Elgar, 1999. Pp. 376. $100.00 cloth.

Given the broad nature of this book's rifle, the reader is struck first by its very narrow focus, even within the confines of the subtitle. As a consequence of his narrow focus, the author unjustifiably and inexplicably ignores important policy alternatives currently being discussed in the field of environmental economics. Ultimately his purpose is to develop a rent-seeking explanation of why direct regulations are invoked more frequently in environmental policy than economic instruments (narrowly defined), even though most economists claim that the latter are "efficient" or "welfare maximizing." However, as I argue here, even this narrow exercise is compromised and may even be suspect because the underlying suppositions embedded in framing the problem may not be accurate.

As noted, the omissions in the book are glaring. On page 1, the reader is informed that "instruments of environmental policy" are divided "according to three ways in which a government can influence an agent's behaviour": direct regulation (command and control), market or economic instruments (tradable permits or pollution taxes), and suasive instruments (education, training, and so forth). I was immediately struck by the fact that this list completely omits the definition and enforcement of property rights as tools of environmental policy. In fact, in more than three hundred pages, Dijkstra does not discuss property rights and their relationship to environmental policy or mention seminal writings by Ronald Coase, Garret Hardin, or any of the more contemporary property-rights analysts such as Richard Stroup, Terry Anderson, Donald Leal, P. J. Hill, or Bruce Yandle. As a result, he inexplicably ignores all the research done primarily by economists in the field of free-market environmentalism (FME). This literature focuses on how the lack of clearly defined property rights has caused most environmental problems and how a clearer definition and enforcement of property rights, possibly through common-law adjudication, would be the best--that is, the most efficient--way to deal with such problems. Even if the author viewed FME as unimportant in terms of actual public-policy considerations, he should have discussed the subject in order perhaps only to dismiss it. Indeed, this approach is the author's...