Local Use of Economic Instruments in the Chesapeake Bay Critical Area Programme

Abstract

As part of the general devolution of authority in many countries and regions to the lowest level of government, local jurisdictions are increasingly encumbered with the responsibility for environmental programmes. The issues that they have to address often pertain to land use. Land use cases also offer the greatest potential for further application of economic instruments. This paper explores the factors that affect the extent to which economic instruments are used at the local level. The Chesapeake Bay Critical Area (CBCA) initiative in Maryland provides a natural experiment to test these factors. Sixteen counties in the CBCA were faced with the same mandate, encouraged to use economic instruments and provided with the same information when developing their local critical area programmes. To assess factors that have affected the use of economic instruments two analyses were conducted. First, the use of all instruments in all countries was analysed. Second, in-depth interviews were conducted in a select subset of counties to gain further insight regarding the reasons for use or non-use of economic instruments. The study finds that both the attributes of the instruments and the local political culture affect the use of such instruments. Specifically, market demand and structure, and the capacity of the jurisdictions and actors in the local development scene, determine the potential for use of the various economic instruments. Actual use is mediated, however, by the extent to which a county has prior experience of the tool, the attitudes of local politicians and citizen groups toward the use of different tools and the way the tools are framed in the local public discourse. Overall, instruments that are seen as simple and providing rewards rather than imposing an additional burden have a greater likelihood of being implemented.