Designing Efficient, Equitable Policies to Abate Acid Rain

Economists recognize a number of criteria for good policy: economic efficiency, equity, administrative simplicity, transparency of the objectives and methods of the program, etc. (Lave, 1981). Thoughtful economists will admit that each of these criteria are generally important in deciding which policy to choose. However, mo.st economists will either confess or assert that economic efficiency is the first and most important criterion, at least in the sense that a .program should be economically efficient, whatever else its attributes.

The reason for the focus on efficiency is simple: Who wants to waste resources? If an objective can be accomplished for lower cost, why pay more? Even if one has no good idea of what one wants to do, it makes sense to do whatever is to be done efficiently. What it comes down to is an almost Calvinistic devotion to preventing waste.