regulation as the mother of innovation - the case of so2 control -- taylor, rubin, hounshell

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  • 7/31/2019 Regulation as the Mother of Innovation - The Case of SO2 Control -- Taylor, Rubin, Hounshell

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    FOU " SHF@NP& Rhf$ ;5& Dh$ ;& Os{`f ;33< @^^D 3;23>5)$ Qgl o|gh{~ ofhdl&

    ghulrl{& o{l {l~shd~`kfl bh{ gl nhdld hb g`~ sosl{$Oaa{l~~ nh{{l~shdaldnl h Io{eo{l [$ Qopfh{& Ehfaiod ^nghhf hb S|kf`n Shf`np& \d`rl{~`p

    hb Nof`bh{d`o Kl{mlflp& ;235 Glo{~ Orld|l& Kl{mlflp& NO 015;35>;3& \^O= lflsghdl: '

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP

    >10

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    [A"A on`r``l~ `d ~|ssh{ hb ldr`{hdildof ehof~= s{hih`de lngdhfhe`l~

    g{h|eg ~|k~`ap= oda bon`f`o`de mdhuflael {od~bl{ klulld ehrl{dild&

    {le|fola {i~& oda h|~`al ldr`{hdildof lq|`sild ~|ssf`l{~ g{h|eg

    lrl{pg`de b{hi gl sold ~p~li h `da|~{p~sln`n nhdbl{ldnl~& s|kf`no

    `hd~& oda nhffokh{o`hd~$

    Qg`~ o{`nfl ~llm~ h nhd{`k|l lis`{`noffp h gl fhde~oda`de alkol

    okh| ghu shf`np `d~{|ild~ nod kl~ kl |~la h `da|nl `ddhro`hd `d

    ldr`{hdildof lngdhfhe`l~ 'lo{fp sosl{~ hd g`~ hs`n `dnf|al Mdll~l "

    ^ng|fzl ?05

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP

    >

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    oda o{ng`ln|{of oda lde`dll{`de {i~oda gl |~l{~ hb gl`{ s{ha|n~&

    gl shul{ nhisod`l~$ Qgl~l onh{~ o{l liklaala `d ~odao{a k|~`dl~~ {lfo

    `hd~g`s~ u`g ~|ssf`l{~& k|pl{~& nhisl`h{~& oda ~|k~`|l~& o~ {ls{l

    ~ldla kp o{{hu~ u`gh| ldash`d~ `d B`e|{l ;$ Qgl ~`defl ao~gla o{{hu `d

    gl e|{l `~ klulld shul{ nhisod`l~ oda o rl{p ~sln`of oda `ish{od

    `ddhro`rl onh{& gl Lfln{`n Shul{ [l~lo{ng @d~`|l 'LS[@)& ug`ng `~

    gl \$^$ |`f`p ~lnh{~ dhds{h nhhsl{o`rl {l~lo{ng& alrlfhsild& oda

    alihd~{o`hd '[A"A) nhd~h{`|i$ H{eod`zo`hd~ u`gh| o{{hu~ o{l

    g`egf`egla klno|~l hb gl`{ `ddhro`rl `ish{odnl= gl`{ nhddln`hd~ h gl

    hgl{ h{eod`zo`hd~ o{l dh o~ lo~`fp alf`dlola o~ `d gl no~l hb gl shul{

    nhisodphLS[@ `l$ Fo~fp& gl h|~`al{~ `d g`~ e|{l {lbl{ h `da|~

    {`l~ h|~`al g`~ khw hb gl `da|~{`of ldr`{hdildof `ddhro`hd nhisflw

    go gorl lngd`nof {lflrodnl h gl ~sln`of`l~ `drhfrla `d~`al `$

    Qgl nhisflw`p hb gl `ddhro`hd s{hnl~~ `d ldr`{hdildof lngdhfhep`dl{i~ hb on`r``l~& ehrl{dild on`hd~& oda onh{~sh~l~ ilghahfhe`nof

    ngoffldel~$ Qg`~ o{`nfl kle`d~ h nhdb{hd gl~l ngoffldel~ kp bhn|~`de hd

    gl b|ff g`~h{p hb ^H

    ;

    nhd{hf lngdhfhep 'so{`n|fo{fp `d gl \$^$)= g`~

    offhu~ a`rl{~l ehrl{dild on`hd~ {lfola h g`~ ~`defl shff|od h kl

    ~|a`la& ug`fl f`i``de gl ro{`lp hb ldr`{hdildof lngdhfhep blo|{l~

    ~|ng o~ gh~l o{`n|fola `d Mlis '?005)ug`ng nh|fa |dal{i`dl sh~~`kfl

    `d~`eg~$ @d oaa``hd& gl o{`nfl `dle{ol~ ~lrl{of {lslookfl q|od`o`rl oda

    q|of`o`rl lngd`q|l~ go o{l ulff l~okf`~gla `d gl lnhdhi`n~ hb `ddhro`hd

    f`l{o|{l h o{{`rl o `~ `d~`eg~$ Qg`~ oss{hong s{hr`al~ o ih{l {lof`~`n|dal{~oda`de hb gl `ddhro`hd s{hnl~~ god odp ~`defl ilgha uh|fa kl

    okfl h s{hr`al 'bh{ |~lb|f {lr`lu~ hb ilghahfhe`nof `~~|l~ `d gl ~|ap hb

    lngdhfhe`nof `ddhro`hd& ~ll Nhgld " Flr`d ?070= ^ngihng " ^ngdh{`de

    ?001)$ B`e|{l > `ff|~{ol~ gl ro{`lp hb odofp~l~ nhda|nla bh{ g`~ o{`nfl

    oda `da`nol~ gl s{`io{p `ddhro`rl on`r``l~ glp ~slom h$ Qgl aoo |~la `d

    gl~l odofp~l~ o{l: 'o) \$^$ sold~ `d ^H

    ;

    nhd{hf lngdhfhep& 'k) ehrl{dild

    {l~lo{ng fokh{oh{p lwslda`|{l~& 'n) ^H

    ;

    nhd{hf lngdhfhep nhdbl{ldnl

    s{hnlla`de~& 'a) io{ml& sl{bh{iodnl& oda nh~ {lda~ 'bh{ nofn|fo`de

    flo{d`de oda lwsl{`ldnl n|{rl~)& oda 'l) `dl{r`lu~ u`g `d|ld`of lwsl{~$

    Dhl go dhg`de `d B`e|{l > ~slom~ h hdfp hdl `ddhro`rl on`r`p$ Sold~&

    bh{ lwoisfl& ilo~|{l `drld`rl on`r`p& k| glp o{l of~h `ish{od h gl

    |dal{~oda`de hb oahs`hd oda a`bb|~`hd& o~ `drldh{~ ps`noffp fl sold~

    klno|~l glp lwsln h io{ml gl`{ `drld`hd~$ [l~lo{ng fokh{oh{p on`r`p

    ~slom~ io`dfp h [A"A b|da`de& k| `~ of~h `ish{od bh{ |dal{~oda`de

    gl uop~ ehrl{dild bon`f`ola mdhuflael {od~bl{ `d gl ^H

    ;

    `da|~{`of

    ldr`{hdildof `ddhro`hd nhisflw$ Qlngd`nof nhdbl{ldnl~ s{hr`al o bh{|i

    bh{ off gl ro{`h|~ `ddhro`rl on`r``l~= glp of~h s{hr`al o aoo ~l bh{

    |dal{~oda`de ngode`de {l~lo{ngl{ dluh{m~ hrl{ `il$ Flo{d`de n|{rl~

    oda lwsl{`ldnl n|{rl~ khg {lln a`bb|~`hd 'io{ml {lda~)& k| of~h ~slom~lso{olfp h flo{d`dekpah`de oda gl b|ff `ddhro`rl s{hnl~~& {l~sln`rlfp$

    Fo~fp& lwsl{ `dl{r`lu~ s{hr`al `d~`eg `dh off gl ro{`h|~ `ddhro`rl

    on`r``l~& o~ ulff o~ `dh gl h|nhil~ hb `ddhro`hd$ Bh{ ih{l alo`f~ hd

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP

    >) s{lnhik|~`hd {la|n`hd hb ~|fb|{ b{hi b|lf~ 'nhiil{n`of lngdhfhe`l~{lihrl fl~~ god >3 sl{nld hb gl ~|fb|{)= oda '1) {lihrof hb ^H

    ;

    b{hi gl sh~

    nhik|~`hd eo~ ~{loi$ Ofgh|eg gl Kol{~lo& Kodm~`al& oda B|fgoi shul{

    ~o`hd~ `d Fhdahd lisfhpla g`~ bh|{g& sh~nhik|~`hd {lihrof lngdhfhep

    ~{olep o~ bo{ konm o~ ?0;2& shul{sfod o`{ shff|`hd nhd{hf ~{ole`l~ g{h|eg

    gl ?023~ eldl{offp lisgo~`zla l`gl{ gl {~ g{ll ~{ole`l~& h{ ~u`ng`de h

    do|{offp fhul{~|fb|{ b|lf~$ ^`dnl go `il& gl bhn|~ go~ ~g`bla h sh~

    nhik|~ hd nhd{hf lngdhfhe`l~gl bhn|~ hb g`~ o{ nflo~ ulff o~ b|lf ~u ng`de$

    Sh~nhik|~`hd nhd{hf lngdhfhe`l~& hgl{u`~l mdhud o~ |l eo~ al~

    |fb|{`zo`hd 'BEA) ~p~li~ h{ ~n{|kk`de lngdhfhe`l~& nhdon o sh~nhik|~`hd eo~ ~{loi u`g o ko~l {loeld 'h{ ~h{kld) `d od ok~h{kl{ `d

    h{al{ h {lihrl ^H

    ;

    $ Nhiil{n`offp oro`fokfl BEA lngdhfhe`l~ nod kl

    nfo~~`la {~ o~ hdnlg{h|eg rl{~|~ {leldl{okfl s{hnl~~l~& oda gld o~

    ul h{ a{p ~p~li~& alslda`de hd gl ih`~|{l flrlf hb gl uo~l iol{`of

    oda gl |l eo~ flor`de gl ok~h{kl{$

    5

    Ugl{lo~ ul ~p~li~ nhis{`~l {h|egfp

    75 sl{nld hb uh{fa BEA noson`p oda a{p ~p~li~ nhis{`~l odhgl{

    ?? sl{nld hb uh{fa noson`p& hdfp o blu {leldl{okfl BEA s{hnl~~l~ o{l `d |~l

    haop 'okh| ; sl{nld hb uh{fa noson`p& nofn|fola b{hi ^{`ro~oro ;333)$

    Qg`~ io{ml ahi`dodnl kp ul ~p~li~ `~ al~s`l gl bon go glp o{l nhd

    ~`al{okfp ih{l lwsld~`rl god a{p ~p~li~= gl`{ ahi`dodnl {l~|f~ b{hi

    gl`{ g`egl{ {lihrof lbn`ldn`l~& gl fo{el{ noson`p hb gl`{ ps`nof ossf`no

    `hd~& oda gl `dl{sfop hb gl~l bonh{~ u`g ehrl{dild on`hd~$ Ul hdnl

    g{h|eg BEA ~p~li~ |~`de f`il~hdl o~ gl ~n{|kk`de {loeld ahi`dol

    `dl{do`hdoffp 'okh| 5; sl{nld hb uh{fa noson`p)$ Qgl f`il~hdl bh{nla

    hw`ao`hd s{hnl~~ `~ s{lbl{{la= ` ioml~ sh~~`kfl {lf`okfl& 0< sl{nld - ^H

    ;

    {lihrof lbn`ldn`l~$ Qgl floa`de a{p BEA ~p~li `~ gl f`il ~s{op a{p`de

    s{hnl~~ 'okh| 7 sl{nld hb uh{fa noson`p)= haop~ ihalf ioml~ sh~~`kfl

    7303 sl{nld ^H

    ;

    {lihrof lbn`ldn`l~$ Dhl go gl nh~~ hb khg ul oda

    a{p ~p~li~ o{l g`egl{ `d {l{h ossf`no`hd h lw`~`de shul{ sfod~&o~ hssh~la h dlu ossf`no`hd h dlu shul{ sfod~$ @d g`~ sosl{& ugld

    BEA ~p~li~ o{l |~la u`gh| oaa``hdof lngd`nof alo`f~& gl ~p~li~ `d

    q|l~`hd ~gh|fa kl |dal{~hha o~ hdnlg{h|eg ul f`il~hdl BEA ~p~li~$

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP

    >

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP

    >

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    >23 FOU " SHF@NP Os{ f ;332?

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    ?073~ QRO& LSO Fok& HBL Qgl HBL klnoil gl ahi`dod s|kf n [A"A b|dal{&om`de hd gl ~|ssh{ hb gl QRO ^goudll bon`f`p

    oda& `d Alnlikl{ ?07> s{`io{`fp h s{hr`al hha nhd{hf& dor`eo`hd&

    oda lfln{`n shul{ 'QRO `~ gl fo{el~ s|kf`n shul{ nhisodp `d gl \$^$) `d gl Qlddl~~ll

    Rofflp {le`hd& gl QRO `~ |d`q|l oihde \$^$ ehrl{dild oeldn`l~ `d go ` uo~ al~`edla o~ o

    blal{of nh{sh{o`hd$k

    Qg`~ fokh{oh{p go~ goa iodp doil~ hrl{ gl plo{~& `dnf|a`de gl Hbnl hb Ldl{ep& I`dl{of~&oda @da|~{p bh{ LSO~ Hbnl hb [l~lo{ng oda Alrlfhsild& gl @da|~{`ofLdr`{hdildof

    [l~lo{ng Fokh{oh{p& gl O`{ oda Ldl{ep Lde`dll{`de [l~lo{ng Fokh{oh{p& oda gl Do`hdof

    [`~m Iodoelild [l~lo{ng Fokh{oh{p `d gl O`{ Shff|`hd S{lrld`hd oda Nhd{hf A`r`~`hd$

    Alnoal Io`d S|kf`n Onqh{~ G`egf`egq~

    Qokfl ;$ Nhdq`d|la

    nhd`d|la |`f`p {l~`~odnl h ~n{|kkl{~ oda |dnl{o`dp o~ h uglgl{ gl

    lngdhfhepko~la ~odao{a nh|fa u`g~oda {lslola fleof l~~ '[oa`od

    Nh{sh{o`hd ?073)$ B`e|{l < ~ghu~ o a{oio`n slom `d s|kf`n [A"A b|da`de

    bh{ ^H; nhd{hf `d ~nof plo{ ?05

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    >2; FOU " SHF@NP Os{ f ;3321 FOU " SHF@NP Os{ f ;33) hb gl sh~nhik|~`hd oda

    ~|ssflildof lngdhfhep {lda oda 5> sl{nld hb gl ro{`odnl '{; 9 3$5>) hb

    gl s{lnhik|~`hd lngdhfhep {lda$ Qgl {l~|f~ o{l dh o~ nflod bh{ gl

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    >22 FOU " SHF@NP Os{ f ;330 sl{

    nld hb gl ro{`odnl '{; 9 3$>0) `~ lwsfo`dla kp ldonla fle`~fo`hd 'ug`ng

    of~h `dnf|al gl ?0 NOO& oda gl ?025 O_O a|{`de

    gl~l plo{~) sf|~ gl ?075 NOO Q{p$

    Bh{ long hb gl sold aoo~l~& ghulrl{& {le{l~~`hd odofp~`~ ~ghu~ go

    `d ^H; nhd{hf& gl aliodas|ff eldl{ola kp fle`~fo`hd({le|fo`hd oda gl

    od`n`so`hd hb {le|fo`hd go~ o ih{l a`{ln lbbln hd `drld`rl on`r`p nos

    |{la kp sold~ god ehrl{dildof lngdhfheps|~g on`r``l~$ O {le{l~~`hd

    hb gl [A"A lwslda`|{l aoo |dal{fp`de B`e|{l < oeo`d~ gl nfo~~ko~la

    sold aoo~l `d B`e|{l 2 lwsfo`d~ hdfp 1 sl{nld hb gl ro{`odnl '{; 9 3$31)&

    oda ~`i`fo{ {le{l~~`hd~ oeo`d~ gl hof ok~{onko~la aoo~l oda gl ~|k

    noleh{p hb sh~nhik|~`hd oda ~|ssflildof lngdhfhep sold~ of~h {lrlof

    dlef`e`kfl nh{{lfo`hd~$?> Bh{ ih{l `dbh{io`hd hd ihalf`de alo`f oda gl~l

    {le{l~~`hd {l~|f~& ~ll Qopfh{& [|k`d& oda Gh|d~glff 'bh{gnhi`de) odaQopfh{ ';33?)$ @d oaa``hd& hgl{ lr`aldnl& `dnf|a`de gl lngd`nof nhdld

    odofp~`~ hb gl ^H; ^pish~`|i oda gl {l~shd~l~ hb `dl{r`lula lwsl{~&

    ~|ssh{~ gl s{hi`dldnl hb fle`~fo`rl({le|foh{p lrld~dhokfp do`hdof

    ~odao{a~`d `da|n`de `drld`rl on`r`p `d ^H; nhd{hf lngdhfhep 'Qop

    fh{ ;33?)$ Qg`~ ~ ulff u`g gl da`de~ hb hgl{ no~l ~|a`l~& o~ a`~n|~~la

    `d gl f`l{o|{l {lr`lu okhrl '~ll l$e$& O~gbh{a& Opl{~ " ^hdl ?073 sl{nld hb gl ~|fb|{) 'Qopfh{ ;33?)$ O~ ~lld `d B`e|{l 5& so

    ld`de `d gl~l lngdhfhe`l~ e{lu {os`afp `d gl lo{fp ?053~& ugld ~odao{a~

    offhula fhu~|fb|{ oda nflodla nhof~ h sfop o s{hi`dld {hfl o~ o nhisf`

    odnl ~{olep bh{ khg dlu oda lw`~`de ~h|{nl~$ Qgl ~{`deld ?050 D^S^&

    ghulrl{& ~`edofla go nflodla nhof~ uh|fa dh fhdel{ kl ~|bn`ld bh{ dlu

    ~h|{nl nhisf`odnl$ Sold`de flrlf~ {l~shdala onnh{a`defp& o~ `da`nola `d

    B`e|{l 5 kp gl s{ln`s`h|~ alnf`dl `d s{lnhik|~`hd sold`de flrlf~ obl{

    go lrld oda o~ ~|ssh{la kp gl {le{l~~`hd {l~|f~ a`~n|~~la okhrl$ @

    osslo{~ go {l~lo{ngl{~ `dl{l~la `d gl ^H; nhd{hf io{ml ioal o aln`

    ~`hd go& ko~la hd gl ?050 D^S^& [A"A ahffo{~ uh|fa kl kll{ ~sld

    hd sh~nhik|~`hd lngdhfhe`l~ u`g ih{l shul{b|f shld`of ^H; {lihrof

    lbn`ldn`l~$?1 Qgl ~{`deldnp hb gl ?050 D^S^ g|~ obblnla gl lngdhfhep

    soguop~ nhd~`al{la bh{ {l~lo{ng$ Dhl go gl ?003 NOO a`a dh {l~h{l

    sold`de flrlf~ bh{ gl lngdhfhep$

    K$ FLO[D@DE KP AH@DE

    Onnh{a`de h `da|~{p odofp~~& BEA rldah{~ hbld `dnh{sh{ol dlu `alo~ `dh

    dlu nhiil{n`of `d~offo`hd~& da`de go gl j|is b{hi gl `alo h gl b|ff

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP >25

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    ~nofl {`of `~ `ish{od h lngdhfhe`nof `ddhro`hd 'In@fro`dl " O{alff

    ?057)$ Hdnl od BEA ~p~li `~ ossf`la h o shul{ sfod& ghulrl{& gl

    {l~shd~`k`f`p bh{ `~ hsl{o`hd ehl~ h gl |`f`p shff|`hdnhd{hf hsl{oh{&

    ugh hbld sfop~ od `ish{od `ddhro`rl {hfl kp ~hfr`de sh~oahs`hd

    lngd`nof s{hkfli~$ Lo{fp ~n{|kkl{ ngoffldel~ s{`io{`fp {lfola h lw{lil

    nh{{h~`hd oda {loeld s{ln`s`o`hd `d~`al gl ~p~li= s{ln`s`o`hd no|~la

    sf|ee`de oda ~nof`de& ug`ng ~hil`il~ {lq|`{la om`de o |d` ahud obl{ o

    blu aop~ hb hsl{o`hd~ `d h{al{ h ~ghrlf& jonmgoiil{& apdoi`l& h{ hgl{

    u`~l nflo{ gl kfhnmoel$ Qgl~l ngoffldel~ nhd{`k|la h g`eg hsl{o`de oda

    io`dldodnl nh~~ bh{ BEA ~p~li~= bh{ lwoisfl& hdl lwsl{ `dl{r`lula

    bh{ g`~ sosl{ hfa hb o |`f`p go {le|fo{fp go~ o iha|fl hbbf`dl oda

    ~l{r`nl ` u`g`d uldpbh|{ gh|{~& |~`de okh| bh{p slhsfl `d o ~g`b h ah

    a`bbl{ld jhk~ ~|ng o~ {lsfon`de dhzzfl~ h{ bod kfoal~$? sl{nld hb `~ h{`e`dof rof|l 'Qopfh{ ;33?)$ Qg`~ rof|l hb 7> sl{nld

    `~ mdhud o~ gl s{he{l~~ {o`h& oda ` `~ nhiso{okfl h s{he{l~~ {o`h~

    bh|da `d iodp hgl{ `da|~{`l~$ Ih~ hb gl hgl{ `da|~{`l~ go lwg`k` o

    s{he{l~~ {o`h hb g`~ ~`zl ah dh ~go{l gl ~{hde ehrl{dild {hfl `d `ddhro

    `hd go a`~`de|`~gl~ ldr`{hdildof lngdhfhep 'O{ehl ?000= @dl{do`hdof

    Ldl{ep Oeldnp ;333)$

    N$ UGL[L @DRLDQ@HD& OAHSQ@HD& ODA LWSL[@LDNL HRL[FOS

    Qg`~ ~ln`hd bhn|~l~ hd gl ^H; ^pish~`|i& o ehrl{dild~shd~h{la nhd

    bl{ldnl go gl LSO kleod b|da`de `d ?05>& {lio`d`de gl ~hfl b|dal{ |d`f

    ?07; ugld ` uo~ jh`dla kp gl Lfln{`n Shul{ [l~lo{ng @d~`|l 'LS[@)=

    g`~ nh~shd~h{~g`s o{{odelild fo~la |d`f ?00? ugld gl AHL klnoil

    gl g`{a nhb|dal{$ Qgl a`rl{~l lwsl{~ `dl{r`lula bh{ g`~ o{`nfl ~{hdefpoe{lla go gl ^H; ^pish~`|i uo~ l~~ld`of h gl lrhf|`hd hb BEA& o~ `

    s{hihla bh{iof oda `dbh{iof mdhuflael lwngodel oihde |`f`p shff|`hd

    nhd{hf hsl{oh{~& BEA rldah{~& ehrl{dild oda |d`rl{~`p {l~lo{ngl{~& oda

  • 7/31/2019 Regulation as the Mother of Innovation - The Case of SO2 Control -- Taylor, Rubin, Hounshell

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    >27 FOU " SHF@NP Os{ f ;3320

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    BEA ~p~li~ nhi`de hdf`dl& h gl sh`d ugl{l dlu BEA ~p~li~ haop

    o{l {h|`dlfp al~`edla bh{ lbn`ldn`l~ `d gl {odel hb 0

  • 7/31/2019 Regulation as the Mother of Innovation - The Case of SO2 Control -- Taylor, Rubin, Hounshell

    23/31

    >53 FOU " SHF@NP Os{ f ;335?

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    R@$ SHF@NP @ISF@NOQ@HD^

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    ehrl{dild on`hd~ hd ldr`{hdildof lngdhfhe`nof `ddhro`hd& gl{l o{l o

    d|ikl{ hb shf`np `isf`no`hd~ go nod kl a{oud b{hi `~ da`de~ ofhdl$

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    ~|ap~ hrl{off da`de~$

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    `d gl \$^$ |d`f gl fol ?023~ 'gl {~ iojh{ sfod uh{m uo~ ahdl `d ?02 NOO& khg hb ug`ng

    ul{l `d~{|ild~ ih{l hb lngdhfheps|~g god aliodas|ff$ Ofgh|eg lwsl{~

    sh`d h gl `ish{odnl hb lngdhfheps|~g `d~{|ild~ ~|ng o~ blal{of

    ~|ssh{ hb gl ^H; ^pish~`|i `d a{`r`de gl lngdhfhep& ` `~ nflo{ go `d

    ^H; nhd{hf& lngdhfheps|~g& o~ ilo~|{la kp [A"A lwslda`|{l~& uo~

    dh o~ `ish{od o~ aliodas|ff o~ od `da|nlild hb `drld`hd hd `~ uop

    h nhiil{n`of ossf`no`hd& o~ ilo~|{la kp sold~$ U`gh| gl io{ml

    ~`i|fola kp ehrl{dild {le|fo`hd& sold`de on`r`p flrlf~ o{l lw{lilfp

    fhu$ Qg`~ ilod~ go |d`f gl fol ?023~& gl s{`rol ~lnh{& ug`ng hud~ih~ sold~ `d ^H; nhd{hf lngdhfhe`l~& uo~ dh b|ffp ldeoela `d nhiil{

    n`offp {lflrod `drld`hd uh{gp hb f`de sold ossf`no`hd~$ @ of~h ilod~

    go gl hrl{off {l~lo{ng nhii|d`p goa hdl fl~~ s|kf`n ~h|{nl hb mdhuflael

    h a{ou hd okh| dhrlf& |~lb|f& oda dhdhkr`h|~ `drld`hd~ `d g`~ lngdhfhep

    o{lo$ @d oaa``hd& u`gh| gl io{ml ~`i|fola kp ehrl{dild {le|fo`hd&

    hsl{o`de lwsl{`ldnl nh|fa dh nhd{`k|l |~lb|f `d~`eg~ `dh ghu h `is{hrl

    gl lngdhfhep$

    Qgl `isf`no`hd hb g`~ `~ go od [A"A oda uo` ldr`{hdildof shf`np

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    sl{bh{iodnl |d`f ldr`{hdildof lngdhfhe`l~ gorl io|{la`~ f`mlfp h

    da ldr`{hdildof `is{hrlild~ l`gl{ o fhde `il `d nhi`de h{ alsldald

    hd gl `ddhro`rl on`r``l~ hb hgl{ do`hd~$ Qgl ~lnhda hb gl~l h|nhil~&

    ug`fl ih{l `ilfp oda fhu nh~ h \$^$ shff|l{~& `~ |df`mlfp h kl gl kl~

    lnhdhi`n ~hf|`hd bh{ gl nh|d{p& o~ ` ilod~ go hgl{ do`hd~ u`ff nos|{l

    gl ~s`ffhrl{~ hb ugolrl{ `ddhro`hd~ o{l `da|nla `d g`~ o{ldo$

    Ul ~ou& hh& go `da|~{p~ od`n`so`hd hb ldr`{hdildof {le|fo`hd&

    dh j|~ gl lw`~ldnl hb {le|fo`hd `~lfb& of~h a{`rl~ `ddhro`hd$ Ahl~ g`~

    ~|eel~ go od ldr`{hdildof shf`np hb alf`kl{ol |dnl{o`dp uh|fa

    offhu gl \$^$ h nos|{l ~hil hb gl~l ~s`ffhrl{~ u`gh| shff|l{~ gor`deh ioml o~ g`eg `drl~ild~ `d ldr`{hdildof lngdhfhep o~ `d no~l~ hb {|l

    ldr`{hdildof {le|fo`hd8 Bh{ lwoisfl& gl ehrl{dild nh|fa alf`kl{olfp

    bh~l{ o ~`|o`hd ~|ng o~ lw`~la `d gl ?073~& ugld gl {lslola `d{ha|n`hd

  • 7/31/2019 Regulation as the Mother of Innovation - The Case of SO2 Control -- Taylor, Rubin, Hounshell

    25/31

    >5; FOU " SHF@NP Os{ f ;33) sh`d~ h|& ~|ng `d~{|ild~

    s{hr`al lq|of ilo~|{l hb |dal{nhisf`odnl oda hrl{nhisf`odnl `dnld`rl~&`da|n`de fl~~ `ddhro`hd god o sl{bh{iodnlko~la ~odao{a `d ug`ng lrl{phdl

    go~ od `dnld`rl h nhisfp$;;

    Qg`{a& ` ~gh|fa kl ~{`deld ldh|eg go ` nod oml oarodoel hb gl hfa

    oaoel go Dlnl~~`p `~ gl ihgl{ hb `drld`hd$ [le|foh{p ~{`deldnp&

    o~ `ff|~{ola `d gl ^H; no~l& `~ `la h `dn{lo~la nhffokh{o`hd u`g`d gl

    {l~lo{ng nhii|d`p on{h~~ h{eod`zo`hdof psl~$ @ `~ of~h `la h `dn{lo~la

    sold`de lisgo~`~ hd ofl{do`rl lngdhfhe`l~a{p BEA oda ~h{kld

    `djln`hd rl{~|~ fhushld`of s{lnhik|~`hd lngdhfhe`l~h ill lw`~`de

    oda od`n`sola ~odao{a~$ Fo~fp& ` ~gh|fa |~l od`n`so`hd h `~ oarod

    oel kp iodoe`de |dnl{o`dp& sl{gos~ kp al~`ed`de ~odao{a~ h kl {lr`~

    `la sl{`ha`noffp '~op lrl{p rl plo{~)$ Qgl lwslno`hd uh|fa kl go gl~l

    ~odao{a~ uh|fa ~{ldegld `d f`eg hb lngd`nof oarodnl~& oda gl `l{o`rl

    ~odao{a~l`de s{hnl~~ uh|fa s{hr`al o 'ih{l) nhd`d|h|~ `dnld`rl bh{

    `ddhro`hd$

    io{eo{lq qopfh{`~ o~~`~od s{hbl~~h{ o gl Ehfaiod ^nghhf hb S|kf`n Shf`np o gl

    \d`rl{~`p hb Nof`bh{d`o& Kl{mlflp$ Gl{ {l~lo{ng |~l~ h{eod`zo`hd glh{p& lnhdhi`n~&g`~h{p& oda lde`dll{`de h lwsfh{l gl lbbln hb ehrl{dild on`hd~ hd `ddhro`hd `dldr`{hdildof nhd{hf oda {ldluokfl ldl{ep lngdhfhe`l~$ Gl{ konme{h|da `dnf|al~fleof oda Nos`hf G`ff lwsl{`ldnl `d gl o{lo~ hb `dl{do`hdof {oal& ldl{ep& oda glldr`{hdild$

  • 7/31/2019 Regulation as the Mother of Innovation - The Case of SO2 Control -- Taylor, Rubin, Hounshell

    26/31

    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP >5>

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    lauo{a ~$ {|k`d `~ s{hbl~~h{ o No{dle`l Ilffhd \d`rl{~`p$ G`~ {l~lo{ng `~ `d glo{lo~ hb ldr`{hdildof nhd{hf& ldl{ep |`f`zo`hd& oda lngdhfhepshf`np `dl{on`hd~$Gl `~ on`rlfp `drhfrla `d ~lrl{of fo{el~nofl o~~l~~ild~ hb do`hdof shf`np `~~|l~$ Qgl~l`dnf|al ldl{ep ["A sfodd`de oda efhkof nf`iolngodel i``eo`hd hs`hd~& `dnf|a`de

    `~~|l~ hb no{khd iodoelild$

    aor`a o$ gh|d~glff`~ s{hbl~~h{ o No{dle`l Ilffhd \d`rl{~`p$ Gl `~ {o`dla `d khglde`dll{`de oda g`~h{p& oda ~|a`l~ `ddhro`hd o gl `dl{~ln`hd hb ~n`ldnl& lngdhfhep&oda `da|~{p$ S{hbl~~h{ Gh|d~glff~ uh{m `dnf|al~ lwld~`rl ~|a`l~ hb `da|~{`of{l~lo{ng oda alrlfhsild& gl alrlfhsild hb iod|bon|{`de lngdhfhep `d gl \d`la^ol~& oda gl {hfl hb `dalsldald `drldh{~ oda ld{ls{ldl|{~ `d gl alrlfhsild hblngdhfhep$

    DHQL^

    ?$ Bh{ lwoisfl& gl io{ml go shff|`hd nhd{hf lngdhfhe`l~ ~o`~bp `~ b|ffpaldla kp ehrl{dild& o~ gl lngdhfhe`l~ s{ha|nl dh lnhdhi`noffp rof|okflehha `d oda hb gli~lfrl~$ Qgl io{ml go ofl{do`rl ldl{ep lngdhfhe`l~~o`~bp& hd gl hgl{ goda& `~ ~gosla kp o ih{l lq|of nhik`do`hd hb gls{`rolfp rof|la oda s|kf`nfp rof|la ngo{onl{`~`n~ hb gl ldl{ep glp s{hr`al=~|ng s{`rolfp rof|la ngo{onl{`~`n~ `dnf|al nh~& oro`fok`f`p& oda hgl{ sl{bh{iodnl o{`k|l~ hb ldl{ep& ug`fl gl`{ s|kf`nfp rof|la ngo{onl{`~`n `~ gl`{`ison hd gl ldr`{hdild$

    ;$ Qgl `~~|l `~ ~o{ de h ioml `d{hoa~ `d gl ldr`{hdildof lngdhfhep `ddhro`hd f`l{o|{l& ghulrl{& g{h|eg o{`nfl~ f`ml Fh`l{ oda Dh{kl{eKhgi '?000)$

    >$ Sl{bh{iodnlko~la ~odao{a~ o{l gl dh{i `d {oa``hdof ldr`{hdildof {le|fo`hd& u`g iodp ~o|h{p s{hr`~`hd~ ~lrl{lfp {l~{`n]`deY LSO~ o|gh{`p h ~sln`bpiodaoh{p nhisf`odnl ilgha~ 'A{`l~ld ;33>:

  • 7/31/2019 Regulation as the Mother of Innovation - The Case of SO2 Control -- Taylor, Rubin, Hounshell

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    >51 FOU " SHF@NP Os{ f ;33$Mllg& [$ J$& S$ O$ @{lfoda& oda [$ L$ Ih~l{ '?072) Lnhdhi`n Lrof|o`hd hbQuldpBh|{ BEA ^p~li~$ Sosl{ s{l~ldla o gl ^H; Nhd{hf ^pish~`|i&Ofodo Dhrlikl{$

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    Mllg& [$ J$& S$ O$ @{lfoda& oda S$ Q$ [oanf`bbl '?00?) Lnhdhi`n Lrof|o`hd hbQuldpL`eg BEA S{hnl~~l~$ Sosl{ s{l~ldla o gl ^H; Nhd{hf ^pish~`|i&Uo~g`dehd& A$N$& Iop$

    Mlis& [$ '?005) Ldr`{hdildof Shf`np oda Qlngd`nof Ngodel: O Nhiso{`~hd hb glQlngdhfhe`nof @ison hb Shf`np @d~{|ild~$ Nglfldgoi& \M: Lauo{a Lfeo{$

    Mdll~l& O$ R$& oda N$ F$ ^ng|fzl '?05

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    Qopfh{& [|k`d " Gh|d~glff LDR@[HDILDQOF QLNGDHFHEP >55

    ;33< Kofap Nldl{ bh{ Fou oda ^hn`of Shf`np oda Kfonmulff S|kf`~g`de Fa$

    [oa`od Nh{sh{o`hd '?073) ^|ap hb O`{ Shff|`hd Nhd{hf Qlngdhfhep: No~l ^|a`l~hb O`{ Shff|`hd Nhd{hf Qlngdhfhep @ddhro`hd~& B`dof Qo~m @@ [lsh{$ Uo~g`dehd&A$N$: Do`hdof Nhii`~~`hd hd O`{ _|of`p$

    [`ldgh|~l& [$ N$ '?00;) On`hd K|`fa~ hd ?003 Nflod O`{ On Nhisf`odnl& Shul{

    Lde`dll{`de0

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    >57 FOU " SHF@NP Os{ f ;33