ABSTRACT
The development banks, which control resources desperately needed by the developing countries, are promoting the use of economic incentives and other market-based strategies as the key to more effective environmental protection. A lesson from the history is that market-based instruments have been applied gradually and cautiously in the most mature environmental protection regime, the United States. The few studies that go more deeply into a single country's experience sometimes do reveal the difficulties of applying environmental instruments, acknowledging, inadequate monitoring and the problem of corruption. The developing world may present its own unique challenges. There are fewer trained people, and the best people tend to be concentrated in capitals rather than in field posts; equipment for monitoring and data gathering is scarce, and basic data are unreliable. Institutions, like people, must practice to learn, and environmental policy is a particularly good practice ground because clean air and clean water are something most societies want.
