Fiscal spending and the environment: Theory and empirics
AbstractDuring economic crises, governments often increase fiscal spending to stimulate the economy. While the fiscal spending surge may be temporary, spending composition is often altered in favor of expenditures on social programs and other public goods which may persist over time. We model and measure the impact of fiscal spending patterns on the environment. The model predicts that a reallocation of government spending composition towards social and public goods reduces pollution. However, increasing total government spending without altering its composition does not reduce pollution. We empirically test these predictions for air and water pollutants showing that they are fully supported.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 62 (2011)
Issue (Month): 2 (September)
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Web page: http://www.elsevier.com/locate/inca/622870
Government spending Spending in public goods Pollution;
Other versions of this item:
- Ramon Lopez & Gregmar Galinato & Asif Islam, 2009. "Fiscal Spending and the Environment: Theory and Empirics," Working Papers 2009-22, School of Economic Sciences, Washington State University.
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
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- Islam, Asif M. & López, Ramón E., 2013. "Government Spending and Air Pollution in the US," Working Papers 144406, University of Maryland, Department of Agricultural and Resource Economics.
- Gregmar Galinato, . "The Challenge of Addressing Consumption Pollutants with Fiscal Policy," Working Papers 2014-1, School of Economic Sciences, Washington State University.
- Lopez, Ramon E. & Palacios, Amparo, 2010. "Have Government Spending and Energy Tax Policies Contributed to make Europe Environmentally Cleaner?," Working Papers 94795, University of Maryland, Department of Agricultural and Resource Economics.
- Halkos, George, 2012. "The impact of government expenditure on the environment: An empirical investigation," MPRA Paper 39957, University Library of Munich, Germany.
- López, Ramón & Palacios, Amparo, 2011. "Why Europe has become environmentally cleaner: Decomposing the roles of fiscal, trade and environmental policies," CEPR Discussion Papers 8551, C.E.P.R. Discussion Papers.
- Halkos, George E. & Paizanos, Epameinondas Α., 2013. "The effect of government expenditure on the environment:An empirical investigation," Ecological Economics, Elsevier, vol. 91(C), pages 48-56.
- Kyriaki Remoundou & Fikret Adaman & Phoebe Koundouri & Paulo Nunes, . "Is the Value of Environmental Goods Sensitive to the Source of Public Funding? Evidence from a Marine Restoration Programme in the Black Sea," DEOS Working Papers 1321, Athens University of Economics and Business.
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