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Bahasa Indonesia) 1:
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Economic instruments have the advantage that they can influence the direction and pattern of development of human settlements and industries without unduly constraining the pace of development. The rapidity with which urban and industrial centers are growing in developing countries provides economic instruments with the opportunity to achieve cost-effective environmental improvements through structural change, an opportunity that flees with every new investment planned and implemented under existing policies. A related characteristic of developing countries is the large number of scattered, small-scale industries which are difficult to either regulate or tax. Product taxes, refundable deposits, and incentives for waste delivery are clearly preferable to effluent standards and charges or to market creation instruments which are costly to monitor and enforce when a large number of small and scattered polluters are involved.4 Rapidly growing vehicular pollution and traffic congestion, as a result of increasing car ownership, are other characteristics of developing countries that the selected instruments must address cost effectively. Car ownership taxes, differential fuel taxes, and road tolls are among such instruments, provided that alternative means of transport (e.g., mass transit systems) are available.ConclusionEconomic instruments as a group are at least as applicable to developing countries as they are to developed countries. The earlier, formative stages of development in which developing countries find themselves make the introduction of new, flexible instruments both easier and more beneficial. However, underdeveloped and inefficient markets and institutional and administrative constraints call for careful selection of specific economic instruments that fit (or are adapted to fit) the country's special circumstances. In addition to the stage of development and associated constraints and opportunities, the country's cultural traditions and social organization are critical factors to consider and build on in selecting and introducing incentive-based instruments for environmental management and sustainable development.Transitional economies, that is, formerly planned economies which are now in the process of market reforms and industrial restructuring, temporarily experience some of the characteristics of developing countries (low incomes, limited tax revenues, priority for recovery and growth), but in other aspects (levels of industrialization, education, etc.) they also share features common with developed Western European countries. [This is less true of Central Asian Republics which share the conditions of developing countries]. Transitional economies (such as Poland and Russia) have historically used economic instruments for pollution control (pollution charges), but their effectiveness as incentives were minimal because of the lack of enterprise autonomy and the existence of the soft budget constraints (charges were paid and included in production costs to be covered by state subsidies).
However, the familiarity of transitional economies with economic instruments and their bitter experience with command and controls in the economic sectors help them resist misguided Western
advice to replicate Western command and control regulations. Many of these countries aspiring to join the European Community (EC) are in the process of adopting EC environmental standards, but
appropriately aim to attain them gradually (through pre-announced compliance schedules and with
the use of economic instruments).
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