THE CRIMINAL WASTE DISCHARGER1

Publication Date01 February 1980
DOIhttp://doi.org/10.1111/j.1467-9485.1980.tb00555.x
AuthorP. J. MCCABE,D. J. STOREY
Scottish
Journal
of
Poliricnl
Economy,
Vol.
27,
No.
1,
February
1980
0
1980
Scottish
Economic
Society
0036-9292,SO
00030030 $02.00
THE CRIMINAL WASTE DISCHARGER’
D.
J.
STOREY
AND
P.
J.
MCCABE
Centre
for
Environaieiital
Studies, London* and
North
East
London
Polyteclriric
I
INTRODUCTION
In the presence of externalities, such as pollution, economists have tradi-
tionally proposed internalisation through the imposition by the State of
Pigouvian taxes, rather than by physical controls upon emissions. In coiii-
paring physical controls with taxes, externality theorists have, howevcr,
assumed both policies were perfectly enforced.2 This paper rejects
this
assumption and applies the economic approach to law enforcement, first
outlined by Becker
(1968)
and Stigler (1970) to the issue of externalities.
The paper outlines a model of the firm which is assumed to be risk-averse
and which attempts to niaximise its expectcd utility of profit. The objective
function is maximised, normal constraints apart, subject to the regulatory
controls over polluting discharges which arise from the production activities
of
the firm. In the context of Great Britain, the regulatory constraint does not
pertain to all levels of output or pollution. Here the firm
is
allowed to
dis-
charge effluent, provided it does not exceed a specified level, called the
consent. Once this consent is exceeded the discharge becomes illegal. This
paper compares enforcement of this form
of
regulation with that
of
an
effluent tax, where revenue is paid on each unit of pollution discharged. The
purpose
of
the analysis is to frame a set of rules whereby the efficiency
of
an
enforcement agency, in its choice
of
weapons, may be judged in term of its
effectiveness in “encouraging” dischargers to reduce their actual effluent
loads. The paper shows it is unlikely that policy in England and Wales has
achieved present water qualities using an optimal mix of weapons. It also
highlights one major difference between the enforcement
of
an effluent tax
from that of a regulatory policy.
*
Address: c/o, University of Durham.
We would like to express our gratitude
to
our former colleagues in the Department of
Economics at Newcastle upon Tyne, particularly Charles Rowley, Martin Walker, Brian
Beavis, Robert Cressy and David
Elliott,
all
of whom have assisted us in the many drafts
of this work. Thanks also go to the Department
of
the Environment for financial support.
The usual disclaimers apply.
It should also be noted that the term
criminal
in the title
is
used, not in any perjorative
sense, but rather
to
indicate that prosecutions are under the criminal law. This
is
to
distinguish them from private actions taken under common law.
Exceptions to this are Downing and Watson (1974), Dewees (1976), Terbonne
(1976)
and Harford (1978).
Date of receipt of final manuscript: 17 August 1979.
30

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