Environmental policy-making in real life: Illegal waste disposal in the presence of organized crime

This chapter deals with the role of the public sector in coping with environmental issues, with a specific focus on waste management. The waste sector is a field of particular interest to analyze government intervention in the economy. Of course, we do not aim at analyzing all possible arguments justifying public intervention in this sector. We focus instead on a particular aspect of the waste management system, related to the emergence of possible illegal behaviors and the presence of organized crime. By developing a theoretical model where illegal waste disposal and criminal organizations are explicitly admitted, we analyze the implications of different environmental tax designs in terms of waste management decisions and Mafia entry incentives.