Efficiency or technology adoption: A case study in waste-treatment technology

Improvements in the effectiveness and efficiency of supply-side waste management are necessary in many countries. In Japan, municipalities with limited budgets have delayed the introduction of new waste-management technologies. Thus, the central government has used subsidies to encourage municipalities to adopt certain new technologies to improve waste-management efficiency. In this study, we measure the efficiency of waste management and explore how technology is related to technical efficiency. We find that municipalities are likely to adopt less-efficient technologies and that the central government's policies are likely to promote inefficient technology adoption by local governments.