In this note the impact of imperfect compliance monitoring on the implementation of agri-environmental policy is analysed. A principal-agent model is used to demonstrate how imperfections in the monitoring process lead to higher social costs from policy implementation. Technical enhancements in the accuracy of compliance monitoring will therefore lead to a reduction in social costs. This is an important result with significant implications for the design and implementation of agri-environmental policy.
|Number of pages||9|
|Journal||Journal of Agricultural Economics|
|Publication status||Published - 1 Jan 1998|