The Indian federation is highly centripetal, and historically, this has left states without the requisite legislative and fiscal authority to take independent action and initiate policies of significance. Consequently, India's response to the global COVID‐19 pandemic was to impose a very severe countrywide lockdown using the mandate of the Union (federal) government. This centralized one‐size‐fits‐all diktat was imposed despite high variations across states in resources, healthcare capacity, and incidence of COVID‐19 cases. We argue that India's dysfunctional federalism is the reason for the centralized lockdown, preventing state and local governments from tailoring a policy response to suit local needs. Using mobility data, we demonstrate the high variation in curtailing mobility in different states through the centralized lockdown. We find that India's centralized lockdown was at best a partial success in a handful of states, while imposing enormous economic costs even in areas where few were affected by the pandemic.

a b s t r a c tThe polluter-pays principle stipulates that the person who damages the environment must bear the cost of such damage. A number of developing countries have recently extended this principle to create an obligation on the state to compensate the victims of environmental harm. This variation of the polluter-pays principle is aimed at ensuring victims' compensation when polluters cannot be identified or are insolvent and at providing stronger incentives for local governments' monitoring of environmentally risky activities. These regimes hold local governments primarily or jointly-and-severally liable for environmental damage and allow them to act in subrogation against the polluters. In this paper we study the effect of these forms of governmental liability on the polluters' incentives and on aggregate levels of environmental harm. We develop an economic model to study the conditions under which governmental liability may be preferable to direct polluters' liability as an instrument of environmental protection. We conclude by suggesting that these variations of the polluter-pays regime may be desirable in environments characterized by widespread poverty, high interest rates, judicial delays and uncertainty in adjudication.

No abstract

The polluter-pays principle stipulates that the person who damages the environment must bear the cost of such damage. A number of developing countries have recently extended this principle to create an obligation on the state to compensate the victims of environmental harm. This variation of the polluter-pays principle is aimed at ensuring victims' compensation when polluters cannot be identified or are insolvent and at providing stronger incentives for local governments' monitoring of environmentally risky activities. These regimes hold local governments primarily or jointly-and-severally liable for environmental damage and allow them to act in subrogation against the polluters. In this paper we study the effect of these forms of governmental liability on the polluters' incentives and on aggregate levels of environmental harm. We develop an economic model to study the conditions under which governmental liability may be preferable to direct polluters' liability as an instrument of environmental protection. We conclude by suggesting that these variations of the polluter-pays regime may be desirable in environments characterized by widespread poverty, high interest rates, judicial delays and uncertainty in adjudication.

No abstract