ABSTRACT
In a recent article in this Review, James Buchanan and Gordon Tullock (hereafter B-T) examined the political processes that led to the formulation of rules and regulations rather than taxes in the control of pollution. Their analysis is stimulating and insightful; however, because of an asymmetry in the analysis, they conclude that regulation will lead to less than optimum-sized firms. I will show that an assumption that is less constricting and more in keeping with the general tenor of their analysis (past and present) will result in firms that are inefficient because their size is greater than optimum.
