Getting people involved : a preference-based approach to water policy in China

Abstract

Market-oriented environmental policy instruments like taxes and fees or regulatory policy instruments like rationing are typically recommended in order to set incentives for citizens to make a sparing use of water. What is often overlooked in this context is that these instruments provoke resistance and non-compliance of citizens if they do not share the values underlying such a policy. Enforcing compliance with environmental policy instruments requires strict monitoring and the prosecution of trespassers and can be rather costly for government. The resistance to government policy and the incentives to avoid or evade the respective policy measures are the greater the less these instruments are in accordance with people's preferences, i. e. the less people accept these instruments and the goals they serve as reasonable. Compliance enforcement costs are mainly monitoring costs to identify trespassers and administration costs for their prosecution. This paper deals with possibilities to reduce such compliance costs by closing the gap between people's preferences on the one hand and government policy on the other in the case of water preservation in China.