Date of Award:
Master of Science (MS)
Economics and Finance
William F. Shughart II
For the past 50 years, Americans have turned to the federal government to solve pressing environmental problems like air and water pollution and climate change. Major environmental policies have helped improve environmental quality to varying degrees, but these policies also have resulted in negative consequences, such as high costs, inefficiency, violations of property rights, or environmental degradation. By applying public choice theory to the evolution of federal environmental policies, we can understand how negative consequences have arisen from seemingly good intentions.
Public choice theory rejects the romantic notion that government officials work solely for the public good. Legislators and bureaucrats are rationally self-interested individuals who try to make themselves better off, like all people. Because legislators are interested in reelection and maximizing their power, they respond to special interest groups and lobbyists who can benefit them. Legislators often codify special benefits for certain companies or industries within environmental legislation and choose winners and losers, regardless of the economic or environmental outcomes. Environmental policies distort markets, altering the price signals that communicate what people value and imposing higher costs on taxpayers and consumers.
Legislators often write environmental laws vaguely, giving bureaucrats wide discretion on how to implement the laws. Bureaucrats often write environmental regulations quickly and without scientific evidence or limited economic considerations, making many of the regulations costly and ineffective in many cases. The number of regulations also grows each year, raising compliance costs while the marginal benefit of these regulations continues to decline.
Major federal environmental policies have had negative consequences, but experts have debated whether these outcomes were or were not intentional. Key politicians and bureaucrats may want to keep the current flawed laws in place because either they or their friends benefit from the status quo. Regardless of the intentionality or unintentionality of these negative consequences, large-scale federal environmental policies have provided decades of evidence that even the most nobly intended laws have significant drawbacks of which the public should be aware.
Lofthouse, Jordan K., "How Good Intentions Backfire: Failures and Negative Consequences of Federal Environment Policies" (2016). All Graduate Theses and Dissertations. 4746.
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