Regulating the Environment: Economic Development and the States
IJED, Vol. 4 No. 3, (2002)
Policy makers at all levels of government would likely agree on the desirability of both a growing economy and a clean, healthy environment. Yet, for decades there has been a widely held belief that environmental controls have undermined economic competitiveness. Thus, state policy makers are often confronted with choices between protecting the environment and promoting economic development. The work presented in this article identifies the various linkages between
state environmental programs and economic growth. In this article, I apply an empirical model, based on transaction cost theory, to state manufacturing industries and investigate how well the double-focus of industry growth and environmental protection has been developed in the states. The results presented here indicate the potential for certain state environmental administrative structures to enhance economic growth by reducing uncertainty and transaction costs.