Free Market
Author:
Gene Callahan
Online Publish Date:
The Free Market 19, no. 8 (August 2001) British economist A.C. Pigou was instrumental in developing the theory of externalities. The theory examines cases where some of the costs or benefits of activities “spill over” onto third parties. When it is a cost that is imposed on third parties, it is called a negative externality. When third parties