Advertisement

Journal of Consumer Policy

, Volume 22, Issue 4, pp 395–417 | Cite as

Morality and Rationality in Environmental Policy

  • Bruno S. Frey
Article

Abstract

The "Moralist" camp takes environmental morale to be essential in order to save nature. The "Rationalist" camp, mainly represented by economists, takes market-based instruments solely relying on extrinsic motivation to be both necessary and sufficient for a successful environmental policy. Recently, the moralists have learned to appreciate economists' incentive instruments, and rationalists have learned that environmental morale is required to find political support for the introduction of their preferred instruments.

Intrinsic motivation in the form of environmental morale is moreover closely connected to the extrinsic motivation via crowding effects. Economic incentives – in particular tradeable emission rights and emission taxes – tend to undermine environmental morale while policy instruments tend to raise it.

An environmental policy based on complementarity is able to exploit the advantages, and to weaken the disadvantages, of the policies proposed by the two camps. Market-based instruments should be accompanied by policies informing and inviting the consumers to engage. In addition, possibilities to participate in the decision-making about environmental policy should be offered (preferably via direct democracy), and the policy should be decided and undertaken at the lowest possible level, normally the local community level.

Keywords

Local Community Economic Policy Environmental Policy Community Level Intrinsic Motivation 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

REFERENCES

  1. Akerlof, G. A. (1989). The economics of illusion. Economics and Politics, 1, 1-15.Google Scholar
  2. Alchian, A. A., & Demsetz, H. (1972). Production, information costs and economic organization. American Economic Review, 62, 777-795.Google Scholar
  3. Barkema, H. G. (1995). Do job executives work harder when they are monitored? Kyklos, 48, 19-42.Google Scholar
  4. Baumol, W. J., & Oates, W. E. (1979). Economics, environmental policy, and the quality of life. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
  5. Becker, G. S. (1976). The economic approach to human behavior. Chicago: Chicago University Press.Google Scholar
  6. Blinder, A. S. (1987). Hard heads, soft hearts. Reading, MA: Addison-Wesley.Google Scholar
  7. Bohnet, I., & Frey, B. S. (1999). The sound of silence in prisoner's dilemma and dictator games. Journal of Economic Behavior and Organization, 38, 43-57.Google Scholar
  8. Buchanan, J. M., & Tullock, G. (1975). Pollutors' profits and political response: Direct controls versus taxes. American Economic Review, 65, 139-147.Google Scholar
  9. Budge, I. (1996). The new challenge of direct democracy. Cambridge: Polity Press.Google Scholar
  10. Butler, D., & Ranney, A. (Eds.) (1994). Referendums around the world. The growing use of direct democracy. Washington, DC: AEI Press.Google Scholar
  11. Cameron, J., & Pierce, W. D. (1994). Reinforcement, reward, and intrinsic motivation: A meta-analysis. Review of Educational Research, 64, 363-423.Google Scholar
  12. Cooter, R. D. (1984). Prices and sanctions. Columbia Law Review, 84, 1523-1560.Google Scholar
  13. Cooter, R. D. (1994). Laws and prices: How economics contributed to law by misunderstanding morality. Berkeley, CA: University of California at Berkeley. Working Paper No. 94-2, Program in Law and Economics.Google Scholar
  14. Cronin, T. E. (1989). Direct democracy. The politics of initiative, referendum and recall. Cambridge, MA: Harvard University Press.Google Scholar
  15. Cropper, M. L., & Oates, W. E. (1992). Environmental economics: A survey. Journal of Economic Literature, 30, 675-740.Google Scholar
  16. Dawes, R. M., McTavish, J., & Shaklee, H. (1977). Behavior, communication, and assumptions about other people's behavior in a commons dilemma situation. Journal of Personality and Social Psychology, 35, 1-11.Google Scholar
  17. Dawes, R. M. (1988). Rational choice in an uncertain world. San Diego, CA: Harcourt, Brace, Jovanovich.Google Scholar
  18. Dawes, R. M., van de Kragt, A. J. C., & Orbell, J. M. (1988). Not me or thee but We: The importance of group identity in eliciting cooperation in dilemma situations — Experimental manipulations. Acta Psychologica, 68, 83-97.Google Scholar
  19. Deci, E. L. (1971). Effects of externally mediated rewards on intrinsic motivation. Journal of Personality and Social Psychology, 18, 105-115.Google Scholar
  20. Deci, E. L., & Ryan, R. M. (1985). Intrinsic motivation and self-determination in human behavior. New York: Plenum Press.Google Scholar
  21. Deci, E. L., Koestner, R., & Ryan, R. M. (forthcoming). Extrinsic rewards and intrinsic motivation: A clear and consistent picture after all. Psychological Bulletin.Google Scholar
  22. De Young, R. (1985–1986). Encouraging environmentally appropriate behavior: The role of intrinsic motivation. Journal of Environmental Systems, 15, 281-292.Google Scholar
  23. Diekmann, A. (1995). Umweltbewusstsein oder Anreizstrukturen? Empirische Befunde zum Energiesparen, der Verkehrsmittelwahl und zum Konsumverhalten. In: A. Diekmann & A. Franzen (Eds.), Kooperatives Umwelthandeln. Modelle, Erfahrungen, Massnahmen, pp. 39-68. Chur: Rüegger.Google Scholar
  24. Diekmann, A., & Preisendörfer, P. (1993). Persönliches Umweltverhalten. Diskrepanzen zwischen Anspruch und Wirklichkeit. Kölner Zeitschrift für Soziologie und Sozialpsychologie, 44, 226-251.Google Scholar
  25. Diekmann, A., & Preisendörfer, P. (1998). Umweltbewusstsein und Umweltverhalten in Low-und High-Cost-Situationen. Eine empirische Untersuchung der Low-Cost-Hypothese. Bern: University of Bern, Institute of Sociology. Mimeo.Google Scholar
  26. Eisenberger, R., & Cameron, J. (1996). Detrimental effects of reward. Reality or myth? American Psychologist, 51, 1153-1166.Google Scholar
  27. Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26, 301-351.Google Scholar
  28. Faulhaber, G. R., & Baumol, W. J. (1988). Economists as innovators. Journal of Economic Literature, 26, 577-600.Google Scholar
  29. Frey, B. S. (1997a). Not just for the money. An economic theory of personal motivation. Cheltenham, UK: Edward Elgar.Google Scholar
  30. Frey, B. S. (1997b). A constitution for knaves crowds out civic virtues. Economic Journal, 107, 1043-1053.Google Scholar
  31. Frey, B. S. (1999). Economics as a science of human behaviour. Boston: Kluwer.Google Scholar
  32. Frey, B. S., & Bohnet, I. (1995). Institutions affect fairness: Experimental investigations. Journal of Institutional and Theoretical Economics, 151, 286-303.Google Scholar
  33. Frey, B. S., & Oberholzer-Gee, F. (1997). The cost of price incentives: An empirical analysis of motivation crowding-out. American Economic Review, 87, 746-755.Google Scholar
  34. Frey, B. S., & Schneider, F. (1997). Warum wird die Umweltökonomie kaum angewendet? Journal of Environmental Law and Policy/Zeitschrift für Umweltpolitik & Umweltrecht, 2, 153-170.Google Scholar
  35. Goodin, R. E. (1994). Selling environmental indulgences. Kyklos, 47, 573-596.Google Scholar
  36. Gouldner, A. W. (1960). The norm of reciprocity: A preliminary statement. American Sociological Review, 25, 161-178.Google Scholar
  37. Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17 (Winter Special Issue), 109-122.Google Scholar
  38. Hahn, R. W. (1989). The political economy of environment regulation: Towards a unifying framework. Public Choice, 65, 21-47.Google Scholar
  39. Hopper, J. R., & Nielsen, J. M. (1991). Recycling as altruistic behavior. Normative and behavioral strategies to expand participation in a community recycling program. Environment and Behavior, 23, 195-220.Google Scholar
  40. Ichniowski, C., Shaw, K., & Prennushi, G. (1997). The effects of human resource management practices on productivity: A study of steel finishing lines. American Economic Review, 87, 291-313.Google Scholar
  41. Jensen, M. C. (1992). Reputational spillovers, innovation, licensing and entry. International Journal of Industrial Organization, 10, 193-212.Google Scholar
  42. Kahneman, D., Slovic, P., & Tversky, A. (Eds.) (1982). Judgement under uncertainty: Heuristics and biases. Cambridge: Cambridge University Press.Google Scholar
  43. Kazdin, A. E. (1982). The token economy: A decade later. Journal of Applied Behavioral Analysis, 15, 431-445.Google Scholar
  44. Kelman, S. (1981). What price incentives? Economists and the environment. Boston: Auburn.Google Scholar
  45. Kirchgässner, G. (1992). Towards a theory of low-cost decisions. European Journal of Political Economy, 8, 305-320.Google Scholar
  46. Kliemt, H. (1986). The veil of insignificance. European Journal of Political Economy, 2, 333-344.Google Scholar
  47. Ledyard, J. O. (1995). Public goods: A survey of experimental research. In: J. Kagel & A. E. Roth (Eds.), Handbook of experimental economics, pp. 111-194. Princeton: Princeton University Press.Google Scholar
  48. Lepper, M. R., & Greene, D. (Eds.) (1978). The hidden costs of reward: New perspectives on the psychology of human motivation. Hillsdale, NY: Erlbaum.Google Scholar
  49. Mueller, D. C. (1989). Public choice II (2nd ed.). Cambridge: Cambridge University Press.Google Scholar
  50. Mueller, D. C. (Ed.) (1997). Perspectives on public choice. Cambridge: Cambridge University Press.Google Scholar
  51. OECD (1994). Integrating environment and economics: The role of economic instruments. Paris: Organisation for Economic Cooperation and Development.Google Scholar
  52. Ölander, F., & Thøgersen, J. (1995). Understanding of consumer behaviour as a prerequisite for environmental protection. Journal of Consumer Policy, 18, 345-385.Google Scholar
  53. Pittman, T. S., & Heller, J. F. (1987). Social motivation. Annual Review of Psychology, 38, 461-489.Google Scholar
  54. Renn, O., Webler, T., & Wiedemann, P. (1995). Competence and fairness in citizen participation. Evaluating models for environmental discourse. Dordrecht: Kluwer.Google Scholar
  55. Rousseau, D. M. (1995). Psychological contracts in organizations. Understanding written and unwritten agreements. Thousand Oaks, CA: Sage.Google Scholar
  56. Rotter, J. B. (1966). Generalized expectancies for internal versus external control of reinforcement. Psychological Monographs, 80 (1, Whole No. 609).Google Scholar
  57. Rummel, A., & Feinberg, R. (1988). Cognitive evaluation theory: A meta-analytic review of the literature. Social Behavior and Personality, 16, 147-164.Google Scholar
  58. Schoemaker, P. J. (1982). The expected utility model: Its variants, purposes, evidence and limitations. Journal of Economic Literature, 20, 529-563.Google Scholar
  59. Stajkovic, A.D., & Luthans, F. (1997). A meta-analysis of the effects of organizational behavior modification on task performance, 1975–1995. Academy of Management Journal, 40, 1122-1149.Google Scholar
  60. Stavins, R. N. (1998). Economic incentives for environmental regulation. In: P. Newman (Ed.), The new Palgrave dictionary of economics and the law, Vol. 2, pp. 6-13. London: Macmillan.Google Scholar
  61. Stuart, C. E. (1984). Welfare costs per dollar of additional tax revenue in the United States. American Economic Review, 74, 352-362.Google Scholar
  62. Sugden, R. (1989). Spontaneous order. Journal of Economic Perspectives, 3(4), 85-98.Google Scholar
  63. Sunstein, C. R. (1997). Free markets and social justice. New York: Oxford University Press.Google Scholar
  64. Tang, S.-H., & Hall, C. V. (1995). The overjustification effect: A meta-analysis. Applied Cognitive Psychology, 9, 365-404.Google Scholar
  65. Thaler, R. H. (1992). The winner's curse. Paradoxes and anomalies of economic life. New York: Free Press.Google Scholar
  66. Thøgersen, J. (1994). Monetary incentives and environmental concern. Effects of a differentiated garbage fee. Journal of Consumer Policy, 17, 407-442.Google Scholar
  67. Thorndike, E. L. (1933). An experimental study of rewards. Teachers College Contributions to Education, No. 580.Google Scholar
  68. Tietenberg, T. (1985). Emissions trading: An exercise in reforming pollution policy. Washington, DC: Resources for the Future.Google Scholar
  69. Weck-Hannemann, H., & Frey, B. S. (1995). Are incentive instruments as good as economists believe? Some new considerations. In: L. Bovenberg & S. Cnossen (Eds.), Public economics and the environment in an imperfect world, pp. 173-186. Dordrecht: Kluwer.Google Scholar
  70. Wiersma, U. J. (1992). The effects of extrinsic rewards on intrinsic motivation: A metaanalysis. Journal of Occupational and Organizational Psychology, 65, 101-114.Google Scholar
  71. Williamson, O. E. (1975). Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.Google Scholar

Copyright information

© Kluwer Academic Publishers 1999

Authors and Affiliations

  • Bruno S. Frey
    • 1
  1. 1.Institute of Empirical Economic ResearchUniversity of ZurichZurichSwitzerland. E-mail

Personalised recommendations