Categories of mbis, Public Economics

Categories of MBIs

In below Table, we have mentioned certain market-based instruments - both direct and indirect. The direct instruments, viz effluent charges, tradable permits and deposit refund schemes, are imposed on the polluting activity itself. On the other hand, indirect instruments, as you can see from Table, are imposed on inputs used for production of the polluting good. The MBIs can be broadly put under seven categories on the basis of the type of economic instruments. These are

  1. Fiscal instruments
  2. Financial instruments
  3. Charge instruments,
  4. Deposit-refund system and bonds,
  5. Market creations,
  6. Liability, and
  7. Redefining property rights

Table: Taxonomy of Market-based Instruments

311_Categories of MBIs.png

Taxes and user charges have the advantage that they reduce the compliance cost of attaining a set target thereby enhancing economy wide performance. The disadvantage with taxes and charges, however, is that it is politically difficult to raise them to optimal level. Subsidies and soft loans/grants on pollution abatement inputs are highly popular both in developed and developing countries. There is the danger of dead-weight loss (defined as the difference between the monetary values of what the government loses and what the beneficiaries gain due to the subsidy) largely due to high costs relative to benefits.

Posted Date: 12/18/2012 7:01:09 AM | Location : United States







Related Discussions:- Categories of mbis, Assignment Help, Ask Question on Categories of mbis, Get Answer, Expert's Help, Categories of mbis Discussions

Write discussion on Categories of mbis
Your posts are moderated
Related Questions
What are your thoughts on Putman’s “Bowling Alone,” the idea that there has been a decline in social capital in North America? Do you agree or disagree with the assertion? Support

Consider a case, if an insurance company merges with a bank. We know that insurance company bears risk for insurers. Suppose, after merger, bank gets in some trouble for reasons ot

U=4X+G where X is private spending and G is public spending. what is the marginal rate of substitution between public and private

Suppose there is certain social norm. Its enactment into statutory law lowers people's private cost of its enforcement because it creates the possibility that violation of norm wi

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Problem 1: i) Define the three main Economic Systems? ii) How can knowledge on price, income and cross price elasticity of demand, be helpful to the Government and a firm,

Q. Describe ex-ante heterogeneity? First conflict reflects heterogeneity among agents due to different policy preferences. Individuals or agents are heterogeneous in a number o

Related Goods Approaches - Direct Substitute Approach Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInterne

This question considers the possibility of foreign aid in exchange for favors. Suppose nation A has RA resources in its treasury and nation B has RB resources. The winning coalitio

Question: (a) Jeffrey Sachs, Columbia University's Earth Institute Development Guru, opines that the humble mobile phone is "the single most transformative tool for developmen