Oil leaks and spills are the most visible externality associated with offshore development, but public policy must also take into account another type of negative externality: cost-shifting through the political process (such as when environmentalists successfully lobby to ban offshore oil drilling). Fortunately, both environmental and political externalities can be resolved through the often-neglected institution of private-property rights.

Other Independent Review articles by John Brätland
    Summer 2010   Capital Concepts as Insights into the Maintenance and Neglect of Infrastructure
    Winter 2008   Resource Exhaustibility