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Environmental Governance in Federal Systems: The Effects of Capital Competition and Lobby Groups

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  • Fredriksson, Per G
  • Gaston, Noel

Abstract

We argue that centralized and decentralized environmental governance yield equivalent environmental regulations. We model worker, environmental, and capital owner lobby groups that seek influence by offering political contributions. Worker lobbying in the decentralized case has an effect on environmental regulations identical to that of capital owner lobbying in the centralized case. This is because the aggregate effects of environmental regulations on income are equivalent under the two institutional designs. Whereas workers carry the full burden in the decentralized case when capital competition occurs, the burden is shared with the capital owners in the centralized case. We present evidence consistent with our theory. Copyright 2000 by Oxford University Press.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 38 (2000)
Issue (Month): 3 (July)
Pages: 501-14

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Handle: RePEc:oup:ecinqu:v:38:y:2000:i:3:p:501-14

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Cited by:
  1. María A. García-Valiñas, 2004. "Environmental federalism: a proposal of decentralization," ERSA conference papers ersa04p492, European Regional Science Association.
  2. Oates, Wallace E. & Portney, Paul R., 2003. "The political economy of environmental policy," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 8, pages 325-354 Elsevier.
  3. Drosdowski, Thomas, 2005. "Democracy Deficits, Inequality and Pollution. A Politico-Economic Analysis," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-323, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  4. Federico Boffa & Giacomo A.M. Ponzetto & Amedeo Piolatto, 2013. "Centralization and accountability: Theory and evidence from the Clear Air Act," Working Papers. Serie AD 2013-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Bert Saveyn, 2013. "On NIMBY and commuting," International Tax and Public Finance, Springer, vol. 20(2), pages 293-311, April.
  6. Y. Hossein Farzin & Jinhua Zhao, 2003. "Pollution Abatement Investment When Firms Lobby Against Environmental Regulation," Working Papers 2003.82, Fondazione Eni Enrico Mattei.
  7. Bert Saveyn, 2006. "Are NIMBY'S commuters?," Center for Economic Studies - Discussion papers ces0604, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  8. Fredriksson, Per G. & Matschke, Xenia & Minier, Jenny, 2010. "Environmental policy in majoritarian systems," Journal of Environmental Economics and Management, Elsevier, vol. 59(2), pages 177-191, March.
  9. Stavins, Robert, 2004. "Introduction to the Political Economy of Environmental Regulation," Working Paper Series rwp04-004, Harvard University, John F. Kennedy School of Government.
  10. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute for the Study of Labor (IZA).
  11. Hua Wang & Wenhua Di, 2002. "The determinants of Government environmental performance - an empirical analysis of Chinese townships," Policy Research Working Paper Series 2937, The World Bank.
  12. Paul Missios & Ida Ferrara & Halis Murat Yildiz, 2011. "Inter-regional Competition, Comparative Advantage, and Environmental Federalism," Working Papers 027, Ryerson University, Department of Economics.
  13. Fredriksson, Per G. & Millimet, Daniel L., 2002. "Strategic Interaction and the Determination of Environmental Policy across U.S. States," Journal of Urban Economics, Elsevier, vol. 51(1), pages 101-122, January.
  14. Fredriksson, Per G. & Mani, Muthukumara & Wollscheid, Jim R., 2006. "Environmental federalism : a panacea or Pandora's box for developing countries?," Policy Research Working Paper Series 3847, The World Bank.
  15. Fredriksson, Per G. & List, John A. & Millimet, Daniel L., 2003. "Bureaucratic corruption, environmental policy and inbound US FDI: theory and evidence," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1407-1430, August.

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