Abstract: This paper provides evidence that China's system of tax revenue sharing is an important explanation for differences in the rate of sewage treatment plant construction among its cities. As a result of the 1994 tax reform, Chinese cities retained different shares of their value-added tax (VAT). Exploiting the persistence of this sharing system, we use the VAT share in 1995 as an instrument for the present fiscal incentives. We find that a 10 percentage point increase in the VAT sharing rate resulted in a 13.8% increase in the construction of sewage treatment capacity. This result suggests that fiscal incentives can play an important role in the provision of pollution-reducing infrastructure.

Abstract: Nearly every state in the United States has developed one or more voluntary cleanup programs (VCPs) to support an alternative approach to cleanup of contaminated sites. Thousands of sites have entered into these programs. Yet, despite the ubiquity of VCPs and the number of enrolled properties, we know little about the factors that influence voluntary action at these sites. This paper reports results from interviews of state officials involved in VCPs in all states, and from a survey of VCP participants in several states. It has two objectives. First, at an application level, the interview and survey results can be used to help improve policy and practice in voluntary cleanup programs. Second, the paper furnishes a unique study to the general literature on environmental voluntary behavior, contributing an empirical, survey-based study of volunteers engaged in cleanup.

Abstract: Beginning in the early 1990s, stricter government regulation to protect public health and the environment led to radical changes in waste technology and management in the United States. More stringent regulation induced wholly new technologies, including the lining of landfills, the control of their gas emissions, and changes in the economic scale and geographic location of operation. Economic integration of waste management transformed “the local dump” into a nationwide and modernized industry. These changes led to unprecedented intervention by local government in attempts to control price, quantity, and location-specific attributes of the $40 billion waste market. Regulatory-induced changes in markets have long been a topic of academic and policy interest, but unique in this case was the emergence of legal challenges—under the dormant commerce clause—concerning public governance and the private sector. This paper reviews the regulation-induced changes in the market, its subnational governmental interventions, and protection of interstate commerce when new technology restructures a local service into a national business.