Public Incentives, Market Motivations, and Contaminated Properties: New Public Management and Brownfield Liability Reform

• Published date: 01 March 2015
• Author: Roy L. Heidelberg,Adam Eckerd
• DOI: http://doi.org/10.1111/puar.12305
• Date: 01 March 2015

Adam Eckerd is assistant professor in

the Center for Public Administration and

Policy at Virginia Tech, where he conducts

research on the complex relationship

between government decisions and social

outcomes, particularly with respect to

environmental justice, public participation,

and nonprof‌i t organizations. He holds a

doctorate from the John Glenn School of

Public Affairs at The Ohio State University.

E-mail: aeckerd@vt.edu

Roy L. Heidelberg is assistant professor

in the Public Administration Institute at

Louisiana State University. His research

focuses on power and accountability in

administrative contexts. He holds a doctor-

ate from the John Glenn School of Public

Affairs at The Ohio State University.

E-mail: royh@lsu.edu

252 Public Administration Review • March | April 2015

Public Administration Review,

Vol. 75, Iss. 2, pp. 252–261. © 2014 by

The American Society for Public Administration.

DOI: 10.1111/puar.12305.

Adam Eckerd

Virginia Tech

Roy L. Heidelberg

Louisiana State University

Public policies are often shaped by prominent

public management frameworks or designed

with particular management frameworks in

mind (May and Winter 2009). In the 1980s and

1990s, the focus of environmental policy shifted to

concentrate less on regulation and enforcement and

more on incentives and legal protection (Jaf‌f e et al.

1995).  e timing of this change coincided (perhaps

not coincidentally) with the rise of the New Public

Management (NPM) (Hood 1991), and the various

ef‌f orts to motivate private involvement with con-

taminated site remediation and redevelopment align

closely with NPM principles. Essential to NPM is the

use of incentives as a policy instrument to engage pri-

vate sector f‌i rms as partners, a focus that functionally

replaces regulation (DeLeon and Denhardt 2000).

 e federal ef‌f orts to address contaminated sites

through liability reform are an excellent example:

regulation is restricted so that incentives can be made

more ef‌f ective and the power of the market can be lev-

eraged. Our primary interest is in the extent to which

various liability reform and incentive policies spur

private sector involvement in site remediation. In line

with NPM expectations, developers have indicated

that their involvement in cleanup activities would

increase with protections from liability (Wernstedt,

Meyer, and Alberini 2006), similar to those imple-

mented through amendments to the Comprehensive

Environmental Response, Compensation, and

Liability Act of 1980 (CERCLA) in 2002.  e 2002

amendments are situated under a dif‌f erent managerial

logic than the 1980 law. While the regulatory focus

of the 1980 law implies a managerial approach of

direct implementation to balance various priorities,

the market-oriented focus of the 2002 amendments

emphasizes getting incentives right and a more indi-

rect approach to f‌i nal outcomes.

We address three main research questions through an

evaluation of data from the Brownf‌i eld Assessment

Grant Program of the U.S. Environmental

Protection Agency (EPA). A hallmark of NPM is

a results-oriented focus and engagement with the

Public Incentives, Market Motivations, and Contaminated

Properties: New Public Management and Brownf‌i eld

Liability Reform

Abstract: Brownf‌i elds pose challenges to both communities and policy makers. Public funds are insuf‌f‌i cient to remedi-

ate these contaminated sites, but, given the uncertainty of contamination and the complexity of liability, private

interests are reluctant to become involved for fear of future litigation. From a New Public Management perspective,

market incentives can be used to encourage private sector remediation of sites. However, this change implies a shift

in administrative function from regulation to “getting the incentives right.” In this research, the authors investigate

whether state and federal reforms aimed at increasing private sector involvement have actually done so, and they con-

sider the implications for other goals of brownf‌i eld remediation, such as providing economic development assistance in

communities where such change is needed. Findings show that developers respond to insurance and tax incentives, but

the authors question whether public incentives are making unattractive redevelopment opportunities worth investing

in or simply making prof‌i table redevelopment opportunities more prof‌i table.

Practitioner Points

• Practitioners involved in brownf‌i eld remediation must try to distinguish between incentivizing already

attractive projects and encouraging remediation of projects that would otherwise be neglected.

• A hands-of‌f approach to steering brownf‌i eld remediation may not adequately address the uncertainty intrin-

sic to remediation, even with promises of liability protection.

• Focusing resources on spurring private sector involvement will necessarily prioritize economic development

over health and equity considerations.

• Governments may need to take a more balanced approach to brownf‌i eld remediation by taking ownership of

and planning for redevelopment in communities where private sector involvement is less likely.