Explaining differences in EMAS participation rates across Europe: the importance of institutions, incomplete information and path dependence

What factors shape environmental policies across Europe? In order to answer this question most economists would probably adopt a Public Choice approach. This approach has convincingly explained some aspects of environmental policies that exist in a similar fashion across Europe. But why do many environmental policies differ across European countries? This article argues that in order to understand differences in environmental policies in Europe North's analysis of institutional change focusing on formal and informal institutions, incomplete information and path dependence is useful. North's approach is applied to explain differences in a particular field of European environmental policy: The implementation of the EU's Eco-Management and Audit Scheme (EMAS) in Germany, the Netherlands, and the UK. The starting point of the analysis is the observation that participation of companies in EMAS markedly differs between countries. It is shown that these differences can be explained with differences in formal and informal institutions in the three Member States, incomplete information of relevant actors, and path dependence.