That is the title of a paper just lately posted by Daniel Cole. The summary:
Economists and authorized students have recognized for many years that “financial devices,” together with cap-and-trade regimes and effluent taxes, can scale back emissions at decrease price than command-and-control laws. But, the US system of environmental regulation stays closely dominated by command-and-control. How can we clarify this outstanding persistence?
This paper considers three different explanations: (1) path-dependency; (2) public selection theories of interest-group politics; and (three) social-welfare/financial effectivity. Utilizing examples, primarily from the US Clear Air Act, the paper finds that not one of the three options gives a enough and full rationalization of the persistence of command-and-control. However all three contribute considerably to a complete rationalization.