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From market failure to organization failure

Author: Gabel, H. Landis ; Sinclair-Desgagné, BernardINSEAD Area: Economics and Political ScienceIn: Business Strategy and the Environment, vol. 3, no. 2, 1994 Language: EnglishType of document: INSEAD ArticleNote: Please ask us for this itemAbstract: This paper argues that environmental economists should not be satisfied only to understand market failure. In addition, they should dedicate their attention to understanding organizational failure within firms. To neglect to "pierce the corporate veil" weakens their understanding of the nexus between environmental policy measures imposed on firms and the firms' responses. The paper goes on to survey some of the recent work in organizational economics relevant to environmental policy, much of which has been contributed by the authors
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This paper argues that environmental economists should not be satisfied only to understand market failure. In addition, they should dedicate their attention to understanding organizational failure within firms. To neglect to "pierce the corporate veil" weakens their understanding of the nexus between environmental policy measures imposed on firms and the firms' responses. The paper goes on to survey some of the recent work in organizational economics relevant to environmental policy, much of which has been contributed by the authors

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