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In Paretian welfare economics, societal choice situations are modelled in a manner analogous to the model of rational choice in micro-economics. Such an approach is inadequate to the analysis of problems of public regulation, among them pollution control. This paper presents an alternative analysis in which actors pursuing goals within a network of constraints attempt to modify these constraints by a number of means. Such a model may be described, following Buchanan, as one of a 'closed behavioural system', or, as suggested here, as a theory of institutional choice. An institutional choice approach to policies for maintaining environmental standards is elaborated in the light of the several control options – ambient standards, effluent standards and technical standards. It is shown that with given resources and technical possibilities, higher levels for one standard inevitably imply lower levels for other standards. The intrinsic superiority of effluent charges is discussed, as are the organizational and political interests which ensure the prevalence of governmental regulation as the preferred tool of environmental control.

The argument presented by Majone in a recent article in Policy and Politics may be summarized thus: By all objective criteria effluent charges can be shown to be superior to other policies for controlling discharges to waterways, yet there is a reluctance among policy makers to their usage. He concludes that since it is unreasonable to assume that policy makers are stupid, or blindly prejudiced, the only possible explanation is that the self-interest of the politician or bureaucrat must be interfering with his objectivity.
It is not the purpose of this note to assert that politicians or bureaucrats are always concerned to maximize public welfare, however defined, or – to use Breton's phrase – to 'minimize the degree of coercion.' Instead, it is intended to outline the pitfalls of an approach which justifies unequivocably a policy and proceeds to conclude that because of its non-introduction legislators are pursuing antisocial objectives. Specifically, the balance of the effluent charge versus the standards approach will be redressed.
Majone states that effluent charges are an efficient method of achieving a specified water quality, but that the restriction of quantities discharged in physical form (by the 'consent' system in the U.K. context) requires information too costly to be collected.

INSTITUTIONAL ENTROPY IS A PROCESS WHICH AN INSTITUTION MAY UNDERGO AS IT GROWS OLDER, CAUSING IT TO FUNCTION AT A LOWER LEVEL AND LESS EFFECTIVELY. THE DATA SUPPLIED BY 300 LARGE CREDIT UNIONS GAVE NO INDICATION THAT OLDER OR NONPROFIT INSTITUTIONS WERE LESS EFFICIENT THAN SIMILAR YOUNGER INSTITUTIONS.

Using W. Niskanen's model of bureaucracy (Bureaucracy and Representative Government, Chicago & New York: Aldine-Atherton, 1971) a supply-demand analysis is used to develop an incentive system. The supply conditions faced by a bureaucracy are not unusual; however, a bureaucracy acts as if it were faced with an all-or-nothing demand curve. A bureau must produce at minimum average cost in order to maximize its budget (which replaces profit maximization in a competitive market), which is the same constraint found in a competitive firm. Both will not earn profits when at equilibrium; however, as monopolistic conditions increase in a bureau, the efficiency of the bureau will also increase, which would result in a surplus instead of no profit. 1 Figure. M. Migalski.

ALTHOUGH THIS STUDY IS VERY MUCH AN EXAMINATION OF THE CONGRESSIONAL COMMITTEE ASSIGNMENT PROCESS, IT IS FIRST AND FOREMOST A FORMAL THEORETICAL PIECE. DESCRIPTION IS A DECIDEDLY SECONDARY CONCERN HERE; RATHER, THE AUTHOR IS CONCERNED WITH ANALYTICAL CATEGORIES AND THEIR THEORETICAL CONSEQUENCES.