Framework for understanding environmental policy in Romania

The aim of the present study is to shed some light on the framework for Understanding Environmental Policy in Romania, in contrast to the existing literature which mostly focuses on developed economies. Specifically, we use the Pigovian and Coasian Externality Theory. For the empirical analysis we use a survey data of the Romanian National Institute of Statistics and estimate Multilevel Regression Model (MRM) to investigate the determinants of environmental behaviour at plant level. Our results reveal some important differences vis-à-vis the developed countries, such as a less significant role for collective action and environmental taxes, which suggests some possible policy changes to achieve better environmental outcomes.