The Coasean framework of the New York City watershed agreement

Over 50 years ago, in 'The Problem of Social Cost', Ronald Coase (1960) attempted to reorient the economics profession's treatment of externalities. He wanted to draw economists' attention away from the world of pure competition as a policy standard and investigate the consequenc...

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Bibliographic Details
Published in:The Cato journal 2014-01, Vol.34 (1), p.1-32
Main Authors: Black, Geoffrey, Dalton, D. Allen, Islam, Samia, Batteen, Aaron
Format: Article
Language:English
Subjects:
Agreements
Analysis
Area planning & development
Cities
Compensation
Competition
Cost
Costs
Delaware
Drinking Water
Environmental aspects
Environmental Groups
Environmental impact
Environmental protection
Externalities
Externality
Failure analysis
Local government
Memoranda
New York
New York, New York
Nonpoint source pollution
Property Rights
Right of property
Tax rates
Taxation
Transaction Costs
U.S.A
United States Environmental protection agency
Water
Watershed management
Watersheds
Welfare economics
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Summary:Over 50 years ago, in 'The Problem of Social Cost', Ronald Coase (1960) attempted to reorient the economics profession's treatment of externalities. He wanted to draw economists' attention away from the world of pure competition as a policy standard and investigate the consequences of transaction costs and property rights for the operation of markets. In 1997, nearly a decade after the Environmental Protection Agency ordered New York City to filter its water to remove contaminants originating in upper New York State watersheds, NYC entered into a memorandum of agreement (MOA) involving the State of New York, a number of local governments and environmental groups in the Catskills, and the EPA. In Coasean terms, the MOA is the consequence of the State of New York's assignment of property rights to the Catskill/Delaware Watershed communities to continue with regional development and current practices, although some of those activities degrade NYC's drinking water. Adapted from the source document.
ISSN:0273-3072
1943-3468