"Abstract: Taxation and liability are compared here as means of controlling harmful externalities. It is emphasized … that liability has an advantage over taxation: inefficiency of incentives arises under taxation when, as would be typical … incentives under liability does not require the state to determine expected harm -- it requires only that injurers pay for harm …

Taxation and liability are compared here as means of controlling harmful externalities. It is emphasized that liability … liability does not require the state to determine expected harm - it requires only that injurers pay for harm that occurs …. However, taxation enjoys an advantage over liability: incentives under liability are diluted to the degree that injurers might …

Taxation and liability are compared here as means of controlling harmful externalities. It is emphasized that liability … liability does not require the state to determine expected harm - it requires only that injurers pay for harm that occurs …. However, taxation enjoys an advantage over liability: incentives under liability are diluted to the degree that injurers might …

Taxation and liability are compared here as means of controlling harmful externalities. It is emphasized that liability … liability does not require the state to determine expected harm – it requires only that injurers pay for harm that occurs …. However, taxation enjoys an advantage over liability: incentives under liability are diluted to the degree that injurers might …

harmful externalities, its actual use has been limited, mainly to the domain of pollution. Liability, in contrast, has great … importance in controlling harmful externalities. I compare the tax and liability here in theory and suggest that the conclusions … help to explain the observed predominance of liability over taxation, except in the area of pollution. The following …