This book is the result of a four years' research project at the European Uni- versity Institute in Florence, Italy. I am grateful to my supervisor, Mark Salmon, for his many ideas. I am also indebted to my co-supervisor, Aart de Zeeuw, for his and Alister Ulph. unfailing support and to Carlo Carraro, Louis Phlips I gratefully acknowledge the help and assistance of many people that advised at some stage, Scott Barrett, Peter Bohm, Lans Bovenberg, Partha Dasgupta, me Klaus Hasselman, Peter Kort, alIi Tahvonen, Cees Withagen and Clifford Wymer. Thanks also to the faculty and students of the...