ABSTRACT
The economic theory of regulation, exemplified by the work of George Stigler, holds that regulations are driven by the needs of business and are acquired, designed, and operated primarily for the benefit of business in a manner, not surprisingly, that protects the profits and competitive environment of regulated business. Regardless of the specific environmental policy or regulation, an assessment must be made of the environmental impacts of human activities. Many environmental policies have had results that were both unanticipated and sometimes undesirable. Cost–benefit analysis is often used to set priorities among policies. The implications of cost–benefit analysis for environmental policy making are very serious, especially in relation to risk assessment. Common pool resources can be loosely defined as natural resource systems that are used by multiple individuals. Different regulatory systems affect different interests in different ways. The type of regulatory system adopted to deal with environmental problems depends on the influence of affected interests on the policy-making process.
