This challenging book addresses environmental and resource management problems that continue to emerge despite increasing attempts at regulation. It proposes a proactive approach to environmental and resource management through the design of institutions and organizations. In addition, it suggests that social rules for environmental management can be improved by taking into account the social costs of externalities and the administrative and transaction costs to reduce them.The chapters in this book draw design ideas from four sources: theory, field studies, simulation and experiment. In the first section, contributors discuss concepts for institutional design including incentives, information, fairness, sustainability, transaction costs, and coordination. Models for policy design in the second section apply welfare economics and game theory to international pollution regulation, cost sharing for pollution reduction, enforcement systems, policy instruments and liability rules. In the final section, experimental methods for institutional design are applied to marketable pollution permits, groundwater laws and markets with uncertainty.

Integrating economics with ideas from political science, psychology, and game theory, Designing Institutions for Environmental and Resource Management will be of interest to all those endeavoring to improve environmental policy.