Publication Type:

Book Chapter


Saving Small Island Developing States, Commonwealth Secretariat, UK, p.59–71 (2010)


The major justification for environmental regulation stems from the public interest theory where environmental policy aims at promoting societal welfare by addressing various sources of market failure. For example, regulatory measures can be used to curb negative externalities like pollution or to control overuse of environmental resources having public goods or open access characteristics (see Chapter 1 for an excellent discussion of these issues). We begin with an overview of the various classes of environmental policy instruments.Next, criteria for choice between these instruments are discussed. The fourth section reviews practical considerations for effective implementation of environmental policies. More specifically,we seek to probe into causes of policy failure which is characteristic of developing countries and therefore a cause of concern for their sustainable development.This part of the discussion takes us to another strand of the economic literature which emanates from the ‘public choice’ school of thought. In essence, the conflicting interests and rent-seeking behavior of agents emerge as important constraints of environmental policy-making and implementation. The final section summaries the main issues.

Cite this Research Publication

Yeti N. Madhoo, “Environmental Policy Instruments and Governance”, in Saving Small Island Developing States, Commonwealth Secretariat, UK, 2010, pp. 59–71.