Quotas May Beat Taxes in a Global Emission Game

Economists have persistently argued that market-based instruments are better suited than command and control instruments (CAC) to achieve pollution abatement targets cost-effectively. However, this advice has not yet fallen on fertile soil. CAC is the predominant instrument in practical environmental policy. The paper attempts to give an explanation for this observation by analyzing two countries negotiating emission reductions in a world with typical institutional restrictions. Negotiations are assumed to be either on a uniform emission reduction quota or a uniform emission tax. Counterintuitively, it turns out that in such a second-best world an agreement under a cost-inefficient quota regime may be superior to an efficient tax agreement with respect to ecological and welfare criteria. Moreover, in contrast to a quota agreement, a tax agreement may not be feasible and stable if countries exhibit asymmetric cost-benefit structures.     

The university as a social economy: Jane Smiley’sMoo

Jane Smiley's novel, Moo, is reviewed for the models of social economy portrayed therein. The models are those of the faculty, university governance, and the students, as well as the total social economy and valuation process to which the foregoing contribute. The basic story, portrayed in part through tales of the lives and foibles of individuals, is one of resource allocation, organization and control, distribution of gains and sacrifices, and the working out of the purposes, values, and objectives of an institution. Also covered is the tale of a faculty economist who lives his life along the lines of the self-interested rationality model.