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How Liable should an Exporter be? The Case of Trade in Hazardous Goods

Helm, Carsten (2005):
How Liable should an Exporter be? The Case of Trade in Hazardous Goods.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Report]

Abstract

This paper analyzes liability issues in the context of internationally traded goods like hazardous waste. If waste disposers of a small open economy are judgement-proof, then the extension of liability to waste exporters distorts the factor allocation and may reduce disposal care. Hence the optimal extension is partial at most. However, extending liability increases incentives of the waste importing country to hold domestic disposers liable. Interaction through the price system and through contracts that condition payments for disposal services on the occurrence of an accident yield identical outcomes if disposers are judgement-proof.

Item Type: Report
Erschienen: 2005
Creators: Helm, Carsten
Title: How Liable should an Exporter be? The Case of Trade in Hazardous Goods
Language: English
Abstract:

This paper analyzes liability issues in the context of internationally traded goods like hazardous waste. If waste disposers of a small open economy are judgement-proof, then the extension of liability to waste exporters distorts the factor allocation and may reduce disposal care. Hence the optimal extension is partial at most. However, extending liability increases incentives of the waste importing country to hold domestic disposers liable. Interaction through the price system and through contracts that condition payments for disposal services on the occurrence of an accident yield identical outcomes if disposers are judgement-proof.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 153
Place of Publication: Darmstadt
Uncontrolled Keywords: extended liability, hazardous waste trade, externalities, moral hazard
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Angewandte Mikroökonomik und Institutionenökonomik
Date Deposited: 22 Oct 2009 11:42
Additional Information:

JEL - Classification : K13, Q38, F18, D63

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