Government Environmental Regulation Failures Research

The problem of environmental pollution is becoming so serious that most government chooses to enforce regulation. But according to the theories of regulation, regulators also are rational economic men, they could be captured by regulates or rent-sought for their power. Thus, it maybe induces regulation failure and makes social welfare lost.This paper assumes that firm maybe choose to bribe government according to the rule of maximize its interest, the government, also could choose to accept or refuse bribery according to its aim.This paper discusses two problems, the first one is when government will be corruptible and what will affect it's happen in environmental regulation. The second one is when the bribery is profitable and how central government's compensation policy affects four aspects as follow:bribery's happen, the incentive of local government to regulate, the pollution of firm and the whole social welfare.In the first model, we don't subdivide the government, but divide it into three kinds by different aim; each one will choose what decision in regulation according to its aim. Because government can choose to accept bribery, so what important problem is the condition of bribery's happen and government collude with firm to shield its pollution, and what factors can affect the happen of bribery. Then we can choose policy to change and control bribery.In the second model, we subdivide government into central government and local government. Central government makes regulation rules and wants to control pollution and supervises the corruption of firm and government, local government executives regulate policy, tries to find firm's real pollution, and local government always maximize its interest, firm pollute environment and choose whether bribe government or not. Through this model, we can know the adequate and necessary condition of bribery happen, then central government change its policy, such as compensation policy for local government and penalty for bribery, and how it affects bribery, motivation of local government, firm's pollution. In the last we how central government's policy affects social welfare by affect local government and firm. With results of the two models, this paper gets some conclusions, and put forward to some suggestions for government's policy which I hope can use to prevent corruption in regulation. In last part, I conclude the deficiency of this paper.