Salient Institutional Issues
New Horizons in Environmental Economics series
Edited by Albert Breton, Giorgio Brosio, Silvana Dalmazzone and Giovanna Garrone
Chapter 2: Contracts in the Vertical Assignment of Powers Over the Environment
Anthony Scott 1 INTRODUCTION AND SUMMARY In this chapter I examine the place of contracts in the assignment and reassignment of environmental powers among governments. Such intergovernmental contracts do exist, and have features in common with private business contracts among farmers, manufacturers, householders, banks and networks of their suppliers and customers. Intergovernmental contracts are often referred to as agreements, understandings or mandates. There is a role for contracting because systems of government are decentralized. In a federation the governments are arrayed in tiers, and powers are assigned among the levels. The top-level unit is referred to as the central, the national or simply the federal government. Units at the mid-level are variously called provinces, states, cantons, republics or regions. Hereafter I will refer to these units as provinces. A third level consists of municipalities and communities. In most unitary states, governmental systems are also decentralized. Many factors help determine the pattern of assignment of powers among the levels. Typically, an assignment was set out in a written constitution or treaty. Then other powers, not originally written into the constitution, have been taken on by various governments. Many of these unwritten assignments can be explained as being similar to or related to one or another of the powers that were itemized in the constitution. Their coming into a government’s ownership has been confirmed by the courts in applying constitutional jurisprudence to conflicts among governments. However, to generalize about the assignment of powers – such as that over the environment – it is not...
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