We consider the enforcement of an environmental standard if the probabilities of inspection are determined by an inspection agency who permanently monitors ambient pollution. This monitoring creates strategic interactions between polluters, which imply that the probability of inspection is...

This paper verifies the robustness of Dixit's claim that common agency problems in the public sector can be solved by restrictions on the incentive schemes that government agencies can develop for the subordinates of other departments. In our model, the outside principal (for instance, an...

This note considers the provision of incentives in public organizations that face the following three constraints. First, no lateral entry is possible. Second, the outside opportunities of bureaucrats are independent of their performance. Third, the organization cannot design incentive schemes...

We consider a special case of Schmutzler's and Goulder''s (1997) analysis of output taxes vs emission taxes as environmental policy instruments. We identify new necessary conditions for the existence of an optimum. We also show that, in this case, it is always optimal to have a mixed tax with...

We consider the enforcement of an environmental standard if the polluters can choose between two levels of noncompliance. The probabilities of inspection are determined autonomously by an inspection agency who permanently monitors ambient pollution. We show that this monitoring creates strategic...