ABSTRACT
This paper examines the role of economic criteria in establishing the Best Available Technology Economically Achievable (BAT) water pollution control regulations. By modeling the Environmental Protection Agency’s (EPA) development of industry-specific effluent limits as a stochastic decision process, it focuses on cost-effectiveness as one of the several criteria that EPA considered. The results suggest that the role that cost-effectiveness played in individual effluent limit determinations diminished in importance over time. The evidence also reveals that a strict adherence to a cost-effective decision rule could have substantially improved the efficiency of the BAT program. This failure suggests the difficulty of achieving an efficient outcome through a bureaucratic regulatory process subject to a variety of statutory criteria. © 1989 Academic Press, Inc.
