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Is Inequality Harmful For The Environment In A Growing Economy?

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  • HUBERT KEMPF
  • STÉPHANE ROSSIGNOL

Abstract

In this paper, we investigate the relationship between inequality and the environment in a growing economy from a political‐economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is made in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment: the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth.

Suggested Citation

  • Hubert Kempf & Stéphane Rossignol, 2007. "Is Inequality Harmful For The Environment In A Growing Economy?," Economics and Politics, Wiley Blackwell, vol. 19(1), pages 53-71, March.
    • Handle: RePEc:bla:ecopol:v:19:y:2007:i:1:p:53-71
    DOI: 10.1111/j.1468-0343.2007.00302.x
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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