Tradable permits are celebrated as a political instrument since they allow (i) firms to equalize marginal abatement costs through trade and (ii) the government to distribute the burden of the policy in a politically fair and feasible way. These two concerns, however, conflict in a dynamic...

"There is a debate among policy analysts about whether fuel taxes alone are the most effective policy to reduce fuel use by motorists, or whether to also use mandatory standards for fuel efficiency. A problem with a policy mandating fuel economy standards is the "rebound effect," whereby owners...

School autonomy and parental participation both influence learning. Autonomy raises the rent available at the school and participation determines whether student learning will benefit from that rent. It is therefore important who is empowered through decentralization

Some corruption of employees will exist when managers are constrained in setting rewards and penalties. Attempts to reduce corruption need to address these constraints. Raising salaries without raising expected penalties will have higher costs than benefits