Waste Management Technology Transfer and an Incentive to Free-Ride

Waste emission is becoming a serious problem around the world, especially in developing countries. Although it is pointed out that part of the problem facing developing countries arises from the lack of a waste disposal technology: technology transfer from a country possessing advanced technology is rarely undertaken. We investigate this problem by focusing upon the role of international technology transfer motivated by trade liberalization. We show that in expecting tariff reductions, the exporting country has an incentive to transfer technology for waste disposal but this is below socially optimum level since the tariff has a property of public bads for the exporting countries. In addition, we consider the effects of an increase in market competitiveness on national welfare