Waste Disposal and Decentralisation: A Welfare Approach

16 Pages Posted: 6 Jan 2015

See all articles by Laura Levaggi

Laura Levaggi

Free University of Bozen - Faculty of Science and Technology

Rosella Levaggi

University of Brescia - Department of Economics and Management

Carmine Trecroci

University of Brescia

Date Written: December 30, 2014

Abstract

Since the seminal work of Oates (1972) on fiscal federalism, a central question of public finance has been which level of a federation should be assigned 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 treatment 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.

Keywords: waste disposal, cross border shopping, decentralisation, welfare

JEL Classification: H70, D62, Q20

Suggested Citation

Levaggi, Laura and Levaggi, Rosella and Trecroci, Carmine, Waste Disposal and Decentralisation: A Welfare Approach (December 30, 2014). Available at SSRN: https://ssrn.com/abstract=2545199 or http://dx.doi.org/10.2139/ssrn.2545199

Laura Levaggi

Free University of Bozen - Faculty of Science and Technology ( email )

Universit├Ątsplatzt, 1
Bozen, 39100
Italy

Rosella Levaggi (Contact Author)

University of Brescia - Department of Economics and Management ( email )

Via San Faustino 74B
Brescia, 25122
Italy
+39 03 0298 8825 (Phone)
+39 03 0298 8837 (Fax)

HOME PAGE: http://www.eco.unibs.it/segdse/rlev/index.htm

Carmine Trecroci

University of Brescia ( email )

Via San Faustino 74B
Brescia, 25122
Italy

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