The Failure Of The Dutch MINAS Policy:
A Transaction Cost Analysis
Author(s)
S. A. L. Wright
Abstract
The paper analyses the Dutch MINAS policy, a tax combined with nutrient
accounting. Its aim was to reduce nitrate levels in groundwater from agriculture
sources. MINAS was beset with problems from the outset. Therefore, the aim of
the paper is to determine the reasons for the ‘erosion’ of the policy. The paper
begins with a theoretical analysis of the design of the instrument, the conclusion
being that, according to economic theory, the instrument appears to be well
designed. Despite this, MINAS still experienced problems, which were so
pervasive that the functioning of the instrument became seriously undermined.
The paper identifies certain key events, specific problems with the design of
MINAS, which resulted in some farmers receiving very high unjustified taxes,
and external socio-economic pressures, which in combination fuelled widespread
resistance to the policy and hence escalating transaction costs due to the
increasingly large administrative burden. The paper concludes that whilst it may
have been possible for policy makers to avoid some of the identified problems it
is considered that the majority were beyond their control. However, it was
perhaps inevitable from the outset that such a system would encounter problems
due to the very high degree of precision that was attempted and thus policy
makers could be criticised for not opting for a simpler system. The paper is
critical of the application of a tax/nutrient accounting system to control nutrient
leaching. The study is based on empirical research, specifically a series of
interviews with key personnel within organizations linked with MINAS.
Keywords: policy erosion, MINAS, transaction costs, administrative costs,
nitrate pollution, environmental tax, nutrient accounting.
Keywords
policy erosion, MINAS, transaction costs, administrative costs,
nitrate pollution, environmental tax, nutrient accounting.
Related Book
Other papers in this volume
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