Template-Type: ReDIF-Paper 1.0
Author-Name:  Lars Gårn Hansen
Author-Name-First: Lars Gårn
Author-Name-Last: Hansen
Author-Email: lgh@foi.dk
Author-Workplace-Name: Institute of Food and Resource Economics, University of Copenhagen
Author-Name:  Frank Jensen
Author-Name-First: Frank
Author-Name-Last: Jensen
Author-Email: fje@foi.dk
Author-Workplace-Name: Institute of Food and Resource Economics, University of Copenhagen
Author-Name:  Eirik S. Amundsen
Author-Name-First: Eirik S.
Author-Name-Last: Amundsen
Author-Email: esam@life.ku.dk
Author-Workplace-Name: Institute of Food and Resource Economics, University of Copenhagen
Title:  Regulating groundwater use in developing countries: a feasible instrument for public intervention
Abstract:  In many developing countries, groundwater is a common pool resource which is potentially subject to the tragedy of the commons if water extraction is not adequately regulated. However, in these countries, the regulatory infrastructure is often too weak to allow detailed monitoring of individual groundwater extraction. For this reason, classical public intervention instruments, such as consumption fees or tradable quotas, are infeasible. Here we present a theoretical foundation for a new public regulatory instrument that can potentially generate the same efficiency inducing incentives as fees and tradable quotas, but without their information and monitoring requirements. The instrument we propose is a tax based on aggregate extraction, rather than individual extraction measures.
Length:  22 pages
Creation-Date:  2011-01
File-URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2011/WP_2011_3_regulating_groundwater_use.pdf
File-Format: Application/pdf
Number: 2011/3
Classification-JEL: 
Keywords: Developing countries, groundwater use, moral hazard problems, taxes
Handle: RePEc:foi:wpaper:2011_3