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Environmental policy in majoritarian systems

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  • Fredriksson, Per G.
  • Matschke, Xenia
  • Minier, Jenny

Abstract

This paper sheds new light on the determination of environmental tax policies in majoritarian federal electoral systems, such as the U.S., and derives implications for the environmental federalism debate on whether the national or local government should have authority over environmental taxes. In the absence of majority bias, the socially preferred policy would be federal district-level taxation which accounts both for cross-boundary pollution and differences in industry concentration across districts. In majoritarian systems, however, where the legislature consists of geographically distinct electoral districts, the majority party (at the national or state level) favors home districts; depending on the location of polluting industries and the associated damages, the majority party may therefore impose sub-optimally high or low pollution taxes due to a majority bias. Majority bias can influence the social-welfare ranking of alternative environmental tax policies. In some cases, majority bias may make decentralized or federal uniform taxation the preferred solution.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 59 (2010)
Issue (Month): 2 (March)
Pages: 177-191

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Handle: RePEc:eee:jeeman:v:59:y:2010:i:2:p:177-191

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Web page: http://www.elsevier.com/locate/inca/622870

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Keywords: Institutions Environmental policy Environmental federalism Geography Majority bias Political economy;

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Citations

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Cited by:
  1. Alberto F. Alesina & Francesco Passarelli, 2010. "Regulation Versus Taxation," NBER Working Papers 16413, National Bureau of Economic Research, Inc.
  2. Per G. Fredriksson & Xenia Matschke, 2014. "Trade Liberalization and Environmental Taxation in Federal Systems," Research Papers in Economics 2014-04, University of Trier, Department of Economics.
  3. Toke Aidt & Jayasri Dutta, 2010. "Fiscal Federalism and Electoral Accountability," CESifo Working Paper Series 3022, CESifo Group Munich.
  4. Strand, Jon, 2013. "Political economy aspects of fuel subsidies : a conceptual framework," Policy Research Working Paper Series 6392, The World Bank.
  5. Tim Friehe & Eric Langlais, 2014. "On the Political Economy of Public Safety Investments," EconomiX Working Papers 2014-8, University of Paris West - Nanterre la Défense, EconomiX.

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