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Manufacturing Doubt: How Firms Exploit Scientific Uncertainty to Shape Regulation

Abstract : Many regulations with first-order economic and environmental consequences have to be adopted under significant scientific uncertainty. Examples include tobacco regulations in the second half of the 20th century, climate change regulations and current regulations on pesticides and neonicotinoid insecticides. Firms and industries have proved adept at exploiting such scientific uncertainty to shape and delay regulation. The main strategies documented include: hiring and funding dissenting scientists, producing and publicizing favorable scientific findings, ghostwriting, funding diversion research, conducting large-scale science-denying communication campaigns, and placing experts on advisory and regulatory panels while generally concealing involvement. In many cases, special interests have thus deliberately manufactured doubt and these dishonest tactics have had large welfare consequences. Largely and unduly neglected by economists, these doubt-manufacturing strategies should now be addressed by the field. Here, we first present a simple theoretical framework providing a useful starting point for considering these issues. The government is benevolent but populist and maximizes social welfare as perceived by citizens. The industry can produce costly reports showing that its activity is not harmful, and citizens are unaware of the industry’s miscommunication. This framework raises important new questions, such as how industry miscommunication and citizens’ beliefs are related to scientific uncertainty. It also sheds new light on old questions, such as the choice of policy instrument to regulate pollution. We subsequently outline a tentative roadmap for future research, highlighting critical issues in need of more investigation.
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Submitted on : Wednesday, July 1, 2020 - 12:11:47 PM
Last modification on : Friday, September 25, 2020 - 3:32:17 PM

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Yann Bramoullé, Caroline Orset. Manufacturing Doubt: How Firms Exploit Scientific Uncertainty to Shape Regulation. Matthias Ruth. A Research Agenda for Environmental Economics, Edward Elgar Publishing, 2020, 978 1 78990 004 0. ⟨10.4337/9781789900057⟩. ⟨hal-02886146⟩

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