Time Inconsistency in Environmental Policy : Tax Earmarking as A Commitment Solution  

Oleh:

Marsiliani, Laura ; Renstrom, Thomas I.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 110 no. 462 (2000), page C123-C138.
Topik: POLICY; time inconsistency; environmental policy; tax earmarking; solution
Fulltext: 123.pdf (213.58KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Tax earmarking imposes a constraint on government policymaking, and may be desirable if it solves a time - inconsistency problem in tax policy. In a two-period economy, in which the policy decisions regarding taxes, public goods provision, and pollution abatement are taken by a majority - elected individual, we show how the time - inconsistency problem in environmental policy arises. We demonstrate that the commitment equilibrium under no earmarking rules cannot be as fully implemented as a no - commitment equilibrium under earmarking rules. However, the earmarking rules do act as a partial commitment mechanism.

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