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Waste disposal and decentralisation: a welfare approach

Author

Listed:
  • Laura Levaggi

    (Libera Università di Bolzano, Italy)

  • Rosella Levaggi

    (Università di Brescia, Italy)

  • Carmine Trecroci

    (Università di Brescia, Italy)

Abstract
Since the seminal work of Oates (1972) on scal federalism, a central question of public finance has been which level of a federation should be as- signed the provision of public goods. In this paper we study the problem of a government that is to choose the optimal centralization/decentralization mechanism for the final treatment of municipal solid waste. We analyze incentives, equilibria and implications of the governance framework for the disposal of waste. The key decisions revolve around the mobility of waste and the externalities (pollution) associated with its disposal, be it incineration or landfill. Moreover, if the Regions are characterized by different levels of efficiency in the processes they apply to the final treat- ment of waste, in theory a certain degree of waste mobility across regions should allow to reap the benefits of higher efficiency. On the other hand, as transportation and other environmental costs implied by mobility and concentration are significant, a trade-off emerges. Our model evaluates the implications of that trade-off for the optimal degree of decentralization in waste management.

Suggested Citation

  • Laura Levaggi & Rosella Levaggi & Carmine Trecroci, 2015. "Waste disposal and decentralisation: a welfare approach," Working papers 17, Società Italiana di Economia Pubblica.
    • Handle: RePEc:ipu:wpaper:17
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    References listed on IDEAS

    as
    1. Massimiliano Mazzanti & Roberto Zoboli, 2009. "Municipal Waste Kuznets Curves: Evidence on Socio-Economic Drivers and Policy Effectiveness from the EU," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(2), pages 203-230, October.
    2. Massimiliano Mazzanti & Anna Montini & Francesco Nicolli, 2012. "Waste dynamics in economic and policy transitions: decoupling, convergence and spatial effects," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(5), pages 563-581, August.
    3. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    4. Koethenbuerger, Marko, 2008. "Revisiting the "Decentralization Theorem"--On the role of externalities," Journal of Urban Economics, Elsevier, vol. 64(1), pages 116-122, July.
    5. Hikaru Ogawa & David E. Wildasin, 2009. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," American Economic Review, American Economic Association, vol. 99(4), pages 1206-1217, September.
    6. H. Spencer Banzhaf & B. Andrew Chupp, 2010. "Heterogeneous Harm vs. Spatial Spillovers: Environmental Federalism and US Air Pollution," NBER Working Papers 15666, National Bureau of Economic Research, Inc.
    7. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April.
    8. Oates, Wallace E., 2008. "On the Evolution of Fiscal Federalism: Theory and Institutions," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(2), pages 313-334, June.
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    More about this item

    Keywords

    waste disposal; cross border shopping; decentralisation; welfare;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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