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When Is Command-And-Control Efficient? Institutions, Technology And The Comparative Efficiency Of Alternative Regulatory Regimes For Environmental Protection, Peter Z. Grossman, Daniel H. Cole

Scholarship and Professional Work - Business

The nominal efficiency of a regulatory regime is determined by comparing its social costs and benefits; the regime is nominally efficient if it produces benefits in excess of its costs. Thus, a regulatory regime can be at once nominally efficient and relatively inefficient. A regulatory regime that is nominally efficient in the early days of pollution-control efforts, when increments of environmental quality are relatively cheap, may (but will not necessarily) grow less efficient over time - producing less return on each dollar invested - as increments of environmental quality grow increasingly expensive. A regulatory regime that is more efficient in …