Table Of ContentEnvironmental Protection:
Public or Private Choice
Economy & Environment
VOLUME4
Thetitlespublishedinthisseriesarelistedattheendofthisvolume.
Environmental Protection:
Public or Private Choice
edited by
D. J. Kraan
Head Bureau of Policy Review,
Ministry of Finance, The Hague, The Netherlands
and
R. J. in 't Veld
Professor of Public Administration
at the Universities of Rotterdam and Leiden
Dean of the Netherlands School of Govemment,
The Hague, The Netherlands
SPRINGER SCIENCE+BUSINESS MEDIA, B.V.
ISBN 978-94-010-5577-2 ISBN 978-94-011-3560-3 (eBook)
DOI 10.1007/978-94-011-3560-3
Printed on acid-free paper
AII Rights Reserved
© 1991 Springer Science+Business Media Dordrecht
Originally published by Kluwer Academic Publishers in 1991
Softcover reprint of the hardcover 1s t edition 1991
No part of the material protected by this copyright notice may be reproduced or
utilized in any form or by any means, electronic or mechanical,
including photocopying, recording or by any information storage and
retrieval system, without written permission from the copyright owner.
TABLE OF CONTENTS
Preface vii
1. Environmental policy making: an introduction
R.I. in 't Veld and D.l. Kraan
A. DECISION-MAKING
2. Aspatial theoretic approach to environmental politics
M.l. Hinich 17
3. Green legislative politics
G. Tullock 39
4. Regulation or taxation
1.1.M. Theeuwes 51
5. Decision making about the environment; the role ofinformation
F. van Dijk 71
B. CASE-STUDIES
6. Transport policies and the environment: regulation and taxation
P. Rietveld and LJ.G. van Wissen 91
7. Road pricing: a logical failure
R.I. in 't Veld 111
8. Dutch manure policy: the lack ofeconomic instruments
FJ. Dietz and K.l.A.M. Termeer 123
9. Dutch manure policy: the role ofinformation
A. Laan 149
C. INSTITUTIONS
10. The role ofproperty rights in environmental protection
D.l. Kraan 167
11. The ecological social contract
1.W. de Beus 181
12. Mirror, mirror on the wall, who is the fairest ofthem all
H.l.G.A. van Mierlo and F.K.M. van Nispen 207
About the authors 221
Subject index 225
Author index 229
PREFACE
Thisvolume is the result ofacollectiveeffort madeby itsauthors to reason and write
about environmental policy from an empirical, rather than from a prescriptive
perspective. Since the authors, like most people, care about the environment and, as
professional economists or political scientists, have someexpertiseto offer in thearea
of policy-design, it was not always easy for them to keep on the intended track.
Whereas they knew that it is unusual to follow a strictly empirical approach in such a
'practical' field as environmental policy, they discovered only during the effort what
kind ofdifficulties would beencountered. Moreover, they learned that itis sometimes
necessary toreason normativelyinordertocatchessential featuresofempiricalreality.
As it turns out, moral notions cannot entirely be neglected in political life. The
predominance ofhomo economicus is not absolute.
We feel that the effort has been worthwile and deserves to be repeated and
expanded. Ithasbeenatrulyco-operativeprojectandweareverygratefultoallauthors
for their willingness to contribute.
SpecialgratitudeweowetoFransvan NispenandAnnemarieRima. Fransvan
Nispen has assisted us in every conceivable way during the preparation ofthis book.
AnnemarieRima, directoroftheTinbergenInstitute, madeavailabletheadministrative
support for the production of this book. Moreover, thanks to her initiative and
enthusiasm the Tinbergen Institute offered its hospitality to the symposium about
environmental policy on 17 April 1990, where the project was originally conceived.
Finally, we wish to express our sincere appreciation for Carien de Ruiter from the
Tinbergen Institute who provided secretarial assistance. Without her extraordinary
efficiency and dedication this book could not have been completed according to
schedule.
Dirk Jan Kraan
Roeland J. in 't Veld
ENVIRONMENTAL POLICY MAKING: AN INTRODUCTION
Roeland J. IN 'T VELD
Erasmus University Rotterdam
Dirk Jan KRAAN
Erasmus University Rotterdam
1.1 THE CONTRIBUTION OF POLITICALSCIENCE
Environmental research isagrowth industry for many scientificdisciplines. Thereare
fewfieldsofinvestigationthatarebeingexploredfromsomanytheoreticalperspectives.
Therelevantdisciplinesbelong mainly tothesphereofthenaturalsciences. Economics
plays an important role, too. So far, however, thecontribution from political science
has been remarkably modest. The question arises why this is so.
Our conjecture is that this situation is due to the particular subject matter of
political science. In the natural sciences and in economics environmental research is
primarily applied research. The effects ofinvestigations in these fields are directed at
the solution ofpractical problemson the basisofexisting knowledge. These problems
typically consistofatargetandanumberofconstraints. Thesolutionconsistsofan in
strument that will ensurethe realization ofthe target without violating theconstraints.
In this paper we shall argue that results from political science cannot be 'applied' in
practical problems in the same straightforward way as can insights from the natural
sciences and from economics. This argument does not imply, however, that political
sciencehasnothingtosayaboutthesolutionofenvironmentalproblems. Itrathermeans
thatthenexusbetweentheoretical analysisandapplicationofresults is somewhat more
complicated than it is in the other sciences mentioned.
Furthermore, even apart from theapplication ofresults, we feel that political
sciencehastodealwithenvironmentalissuesforthesimplereasonthattheseissueshave
grown intopoliticalissues. Sincepolitical scienceisanempiricaldiscipline, itoughtto
dealwithany issuethathasacquiredpoliticalrelevanceinasocietyunderinvestigation.
Obviously, itis moreworthwile tostudy someissuesthanothers, butin manysocieties
theenvironmentnow playssuch an importantrole in the politicalarena that itisabout
time for it to receive the special attention ofthe discipline.
This volume is an attempt atexploration in this field. It presentsan overview
and identifiesa numberofimportant themes. We hope that it will convince the reader
EnvironmentalProtection:PublicorPrivateChoice,pp. 1-13
2 In 't Veld, Kroon
ofthe interestofthefield and that itwillinvokefurtherdiscussionand scientificwork.
In this introductory paper we intend to elaborate two principles that have guided our
work on this book. These principles are:
I. a moderate public choiceapproach to the policy-making process;
2. a strict separation between empirical research and policy design.
We have used these principles in the first place for the selection and ordering ofthe
themes of the individual papers and in the second place for the advancement of
conformity in the analytic approach throughout the book. We are aware that these
principles reflect some fundamental aspectsofourown theoretical thinking. However,
we cannot see this as a disadvantage. We feel, on the contrary, that consistency of
analytic approach belongs to the essence ofa volume of papers and that this feature
ought to distinguish such a volume from an issueofalearnedjournal.
In Section2weshall identify four positionsin the theoreticaldiscussionabout
publicchoiceand explain ourpreference for what we havecalled the 'moderatepublic
choice' position.
In Section 3 we shall discuss the distinction between empirical research and
policy design and explain how the separate papers in this volume can becharacterized
in terms ofthis distinction.
Ourintroductory paperwillconcludewithaprovisionalassessmentofthelessons that,
in our view, can be learned from theexplorations in this volume
1.2 FOUR THEORIES OF PUBLIC CHOICE
Thepublicchoiceapproachinpoliticalsciencedistinguishesitselffromotherapproaches
by its insistence on methodological individualism. According to this fundamental
assumption, the subject matterofpolitical scienceconsists in the process ofcollective
decisionmaking,particularlyinpublicorganizations.Collectivedecisionsareconsidered
as an amalgamation ofindividual decisions.
However, theacceptanceofmethodological individualism does not imply that
thepublicchoiceapproachcan beconsideredasauniform methodology. In particular,
there isa majordispute within the main approach about the roleofnormative motives
in political behaviour. In this dispute we distinguish the following four positions:
I. radical public choice;
2. individual moralism;
3. constitutional economics;
4. moderate public choice.
Adherents of 'radical public choice' treat all forms ofpolitical behaviour as
being motivated by individual preferences. In this view there is no place for moral
Environmentalpolicy making: an introduction 3
considerations in theexplanation ofpolitical behaviour. Nodistinction is made in this
respect between kinds ofpolitical behaviour, such as access to a public organization,
participationinitsdecisionmakingbodies,voicingofproposals,orvotingonproposals,
nor between kinds ofagents, such ascitizens, politicians, or bureaucrats. Every agent
behaves as if he were a pure utility maximizer or 'homo economicus'. In fact, the
position of radical public choice implies an entirely economic interpretation of the
political process. In the mainstream economic theory ofmarketdecision making there
isnoplacefor moral motives, either. However, twocaveatsapply. Firstly, theconcept
ofhomoeconomicus isless narrow than isoften implied by outsidecritics. Itdoes not
imply that individual preferences are exclusively selfish or, in other words, that net
wealth is the only argument in utility functions. Although supporters usually feel that
altruistic motivesare not particularly strong inconcreteeconomicor political settings,
this feeling is not inherentto theeconomic interpretationofthepolitical processitself.
The utility functions ofagents in political models may exhibit interdependence in the
sameway as may be the case in economic models. Altruism is included in the model.
Secondly, adherents of this position do not deny that some human behaviour is
motivatedbymoralconsiderations. Theydonotevendenythatsomepoliticalbehaviour
is motivated in such a way. Their claim is rather that, for the purpose ofexplanation
and prediction, it is useful to assume that people behave as if they were utility
maximizers, and that thisassumption isjustas useful with respectto human behaviour
in the political arena as it is to that in the market-place.
Theoppositeofradical publicchoiceisindividual moralism. Adherentsofthis
positionhold thatpoliticalbehaviourispredominantlydeterminedbymoral motives, in
contrast to economic behaviour. In this view political man is fundamentally different
from economic man (hence we can speak of 'bifurcated man'; Buchanan, 1962). In
analogy to the radical publicchoiceposition, no distinction is drawn between kinds of
political behaviour or kinds ofagents. Individual acts, such as participation orvoting,
are not explained by preferences but by moral convictions which are vested in such
political ideologies as liberalism, social democracy orconservatism. According to this
position itis the taskofpolitical theory toclarifythechoices thatpeopleare makingin
terms of their belief systems and to clarify and improve the contents of these belief
systems themselves. The latter task amounts to the interpretation of the concepts of
commutative and distributive justice that are characteristic of these belief systems in
terms of operational norms that can be used to assess concrete public policies. This
particular field is known as normative public choice theory (or modern welfare ec0
nomics).l Individual moralism implies that political theory is largely a normative
I ForareviewseeMueller 1990.
4 In 'r Veld, Kraan
discipline, moreakin toethicsthan to economicsorthe natural sciences. On theother
hand there is room for empirical research in this view, but not for the purposes of
hypothesis testing and modelling. Empirical work is rather directed at the description
andanalysisofprevailingpoliticalbeliefsystems. Itratherresemblesdescriptiveethics
than empirical work in the positive sciences.
The third position tobedistinguished is thatofconstitutionaleconomics. This
position is associated with the name of Professor Buchanan, who has proposed and
developeditinanimpressivescientificoeuvre. Itsbasicclaimisthattheoreticalanalysis
should proceed in different ways for different kinds of political decisions. The
fundamentaldistinctionisthatbetweendecisionsattheconstitutionallevelofchoiceand
decisionsatthepost-constitutional levelofchoice. Thefirst typeofdecisiondetermines
the 'legal-institutional-constitutional structure of the polity' (Buchanan, 1987). The
second type ofdecision determines the economic and political process within agiven
structure. In the sphere of post-constitutional decision making the model of 'homo
economicus' applies, so that only positive analysis makes sense. In the sphere of
constitutional choice it does not, at least not in a straightforward way because homo
economicus has preferences for economic goods -either to be obtained in the market
place or in the political arena - but not for institutional rules. Therefore it may be
assumed that at the level of constitutional choice decision makers are susceptible to
normative reasoning. Given the behaviour ofhomo economicus in post-eonstitutional
settings, such reasoning can make use ofnormative public choice theory and identify
constitutionalarrangementsthatproduceoutcomesin accordancewith someconceptof
commutative or distributive justice. It is commonly understood that it will never be
possible to design constitutions that equal the 'invisible hand' of the market in its
capacity to produce sociallydesirable results outofprivately motivated behaviour, but
that is not say that there is no scope for improvement. Indeed, the system of
representativedemocracy,asappliedinthewesternworld,producesmanyoutcomesthat
remind oneofthe invisible hand (Tullock, 1984) and it is certainly possible to make
further progress in this direction. In the words of Buchanan: "If the raison d'etre of
social science is to advance discussion ofpotential institutional-eonstitutional reform,
we must acknowledge both the dependence of individual choice alternatives on the
institutional-constitutional constraints and the possible variability of such constraints"
(Buchanan, 1989).
The fourth position that can be distinguished is that of 'moderate public
choice'. It has accepted the concept of homo economicus as described above from
radical public choice. It should be recalled that altruism may appear to be relevant.
From constitutional economics it has borrowed the distinction between two levels of
choice. However, it draws the dividing line somewhat differently than is usual in the
