ABSTRACT
This chapter focuses on several government failures that contribute to the toxic tort dilemma. It argues that as a major demander of toxic products and a major producer of toxic waste, the government is often the cause of toxic exposures. When government immunity from tort liability applies, however, government decisionmakers have little incentive to disseminate information to potential victims of potential toxic harms. Assuming that exposure to toxic substances generates harm, the costs that arise from government use of toxic substances tend to be higher than the costs from harms arising from activities subject to tort liability. Government immunity can be extended to firms that contract with the government. The chapter analyses firms with government provided immunity also have weaker incentives to protect affected parties. The immunity that the government grants itself has been extended in some situations to private firms in the form of the "government contractor" defense.
