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Ineffective Program for Reducing Smoking Spillovers Italy's Ineffective Program for Reducing Smoking Spillovers In most systems for reducing pollution using an effluent fee, the government is directly involved as a fee collector. For example, at one point in time the Italian government decided to implement an effluent fee system aimed at reducing secondhand smoke in restaurants, however, it put the restaurants at the center of enforcement efforts.

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If a customer lights up a cigarette in a smoke-free zone in a restaurant in Italy, its managers were legally bound to charge the violator a fine as part of the bill and to transmit the amount of the fine to the government. Many restaurant owners refused to participate in the government's program. Some worried about losing customers they penalize. Others simply did not want to go to the trouble to collect the government's fees without receiving compensation for the taxcollecting expenses they would incur. Consequently, the Italian government's effluent-fee system has seemingly failed to reduce secondhand smoke in restaurants. For Critical Analysis: How could have the Italian government redesign its effluent-fee system so that it more effectively cuts down on the spillover costs incurred by nonsmoking patrons of restaurants? How can a tax correct for a spillover cost? Ineffective Program for Reducing Smoking Spillovers