Economic Incentives for Pollution Control in Developing Countries: What Can We Learn from the Empirical Literature?

This review seeks to analyze the implementation of Market Based Instruments (MBIs) in developing countries.

The focus is mostly (but not exclusively) on the empirical literature. The evidence is that MBIs have played a role in pollution reduction. However, this conclusion is mostly based on evidence from one country – China. Moreover, these tools seem to be used in conjunction with command and control instruments.