Regional environmental agreements under incomplete information and political pressure

This paper addresses the issue of environmental agreements under incomplete information at both the national and the international levels, taking into account the fact that firms might exercise political pressure on their country’s government. Domestic firms may have private information about their...

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Autor principal: Conte Grand, Mariana
Formato: Objeto de conferencia
Lenguaje:Inglés
Publicado: 1997
Materias:
Ciencias Económicas
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/169306
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-169306
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
spellingShingle Ciencias Económicas
Conte Grand, Mariana
Regional environmental agreements under incomplete information and political pressure
topic_facet Ciencias Económicas
description This paper addresses the issue of environmental agreements under incomplete information at both the national and the international levels, taking into account the fact that firms might exercise political pressure on their country’s government. Domestic firms may have private information about their cost functions (and might have the ability to influence the government), while countries generally have information unknown to other parties engaged in treaty negotiations. At the domestic level, governments can act as mechanism designers to implement some environmental regulation. However, efficiency cannot be achieved under incomplete information when a system of taxes is not sufficient to separate “cleaner” from “dirtier” firms. Neither can a mechanism be internally efficient when some degree of political pressure is present. But, in both cases, countries can improve over the no domestic policy situation. At the international level, such kinds of “solutions” are not possible due to the absence of a supranational authority to design the corresponding mechanism. Then, some sort of bargaining among countries has to take place. This paper shows that, even in case of incomplete information where the parties involved are not willing to reveal their characteristics, countries can sign environmental agreements which improve efficiency relative to status quo and are respected by everybody in equilibrium no matter what some countries beliefs are about the other countries’ types. The nature of those agreements depends on the fundamentals of each country (consumers’ preferences and firms’ costs), on the pre-existent domestic regulation and the situation to design them (the degree of knowledge of national firms’ costs and their political pressure), and also on the information on the possible types the other parties in the negotiations can be.
format Objeto de conferencia
Objeto de conferencia
author Conte Grand, Mariana
author_facet Conte Grand, Mariana
author_sort Conte Grand, Mariana
title Regional environmental agreements under incomplete information and political pressure
title_short Regional environmental agreements under incomplete information and political pressure
title_full Regional environmental agreements under incomplete information and political pressure
title_fullStr Regional environmental agreements under incomplete information and political pressure
title_full_unstemmed Regional environmental agreements under incomplete information and political pressure
title_sort regional environmental agreements under incomplete information and political pressure
publishDate 1997
url http://sedici.unlp.edu.ar/handle/10915/169306
work_keys_str_mv AT contegrandmariana regionalenvironmentalagreementsunderincompleteinformationandpoliticalpressure
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spelling I19-R120-10915-1693062024-08-29T20:08:07Z http://sedici.unlp.edu.ar/handle/10915/169306 Regional environmental agreements under incomplete information and political pressure Conte Grand, Mariana 1997 1997 2024-08-29T16:53:32Z en Ciencias Económicas This paper addresses the issue of environmental agreements under incomplete information at both the national and the international levels, taking into account the fact that firms might exercise political pressure on their country’s government. Domestic firms may have private information about their cost functions (and might have the ability to influence the government), while countries generally have information unknown to other parties engaged in treaty negotiations. At the domestic level, governments can act as mechanism designers to implement some environmental regulation. However, efficiency cannot be achieved under incomplete information when a system of taxes is not sufficient to separate “cleaner” from “dirtier” firms. Neither can a mechanism be internally efficient when some degree of political pressure is present. But, in both cases, countries can improve over the no domestic policy situation. At the international level, such kinds of “solutions” are not possible due to the absence of a supranational authority to design the corresponding mechanism. Then, some sort of bargaining among countries has to take place. This paper shows that, even in case of incomplete information where the parties involved are not willing to reveal their characteristics, countries can sign environmental agreements which improve efficiency relative to status quo and are respected by everybody in equilibrium no matter what some countries beliefs are about the other countries’ types. The nature of those agreements depends on the fundamentals of each country (consumers’ preferences and firms’ costs), on the pre-existent domestic regulation and the situation to design them (the degree of knowledge of national firms’ costs and their political pressure), and also on the information on the possible types the other parties in the negotiations can be. Este artículo analiza el tema de la firma de tratados ambientales internacionales tomando en cuenta la existencia de falta de información y presiones políticas. Las empresas nacionales tienen información acerca de sus funciones de costos (y eso les da poder para poder influenciar al gobierno), mientras que los países cuando van a negociar tratados ambientales poseen información acerca de las empresas y consumidores nacionales que los otros países no tienen. Al nivel doméstico los gobiernos pueden actuar como diseñadores de un mecanismo para implementar algún tipo de regulación ambiental (por ejemplo, impuestos sobre las emisiones). Sin embargo, la eficiencia interna no puede ser alcanzada bajo información incompleta cuando un sistema de impuestos no alcanza para “separar” las empresas “limpias” de las empresas “sucias”. Tampoco puede la regulación ambiental ser eficiente a nivel nacional si existe algún nivel de presión política. Pero, en ambos casos, los países pueden mejorar sobre la situación de no hacer ninguna política ambiental doméstica. A nivel internacional, este tipo de soluciones no son posibles debido a la ausencia de una autoridad supranacional para diseñar el mecanismo correspondiente. Por lo tanto, se puede pensar que lo que sucede es algún tipo de negociación entre los países. Este artículo muestra que aún en los casos de información incompleta cuando las partes del tratado no están dispuestas a revelar sus características, los países pueden firmar acuerdos que mejoran la eficiencia con respecto al status quo y son respetadas por todos en equilibrio cualquiera sean las creencias que cada uno tenga acerca de qué tipo de país es el otro. La naturaleza de esos tratados depende de los ”fundamentals” de cada país (las preferencias de los consumidores y los costos de las empresas), la regulación ambiental interna preexistente al tratado y las condiciones en que ésta fue diseñada (el grado de conocimiento de los costos de las empresas nacionales y la presión política que ejercen sobre el gobierno), y también de la información sobre los posibles tipos de los cuales pueden ser las otras partes en la negociación. Facultad de Ciencias Económicas Objeto de conferencia Objeto de conferencia http://creativecommons.org/licenses/by-nc-sa/4.0/ Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) application/pdf

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