Berkeley Program in Law and Economics

The paper consists of two parts: a theoretical part followed by a practical part. On the basis of the economic literature concerning environmental law and economic development it is illustrated how criteria can be developed to examine whether specific environmental policy instruments can be used in the context of developing countries. Next these hypotheses are applied in a case study of Peru. The starting point for the analysis is the recently established Ministry of the Environment and its implications. Then a recent legislative proposal for the establishment and management of municipal and regional protected areas shall be analysed In the conclusions based on the case-study some ideas shall be presented on how to minimize the disturbing effects of external players in the form of lobbying or corruption in law-making and administration.