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The Ecological Impact of Place‐Based Economic Policies

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  • Teevrat Garg
  • Ajay Shenoy

Abstract

Does economic development have an unavoidable ecological cost? We examine the impacts on forest cover of one of India's signature place‐based economic policies involving massive tax benefits for new industrial and infrastructure development following the creation of the new state of Uttarakhand. Using a spatial difference‐in‐discontinuities design, we show that the policy, which explicitly excluded environmentally damaging industries, resulted in no meaningful change in local forest cover. Our results suggest that even in settings with low levels of enforcement, place‐based economic policies that deliver transformative economic expansion can be implemented with minimal ecological costs.

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  • Teevrat Garg & Ajay Shenoy, 2021. "The Ecological Impact of Place‐Based Economic Policies," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1239-1250, August.
    • Handle: RePEc:wly:ajagec:v:103:y:2021:i:4:p:1239-1250
    DOI: 10.1111/ajae.12193
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    Cited by:

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    2. Bhattacharjee, Arnab & Aravena, Claudia & Castillo, Natalia & Ehrlich, Marco & Taou, Nadia & Wagner, Thomas, 2022. "Agroforestry Programs in the Colombian Amazon: Selection, Treatment and Exposure Effects on Deforestation," National Institute of Economic and Social Research (NIESR) Discussion Papers 537, National Institute of Economic and Social Research.
    3. David Wuepper & Robert Finger, 2023. "Regression discontinuity designs in agricultural and environmental economics," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(1), pages 1-28.
    4. Heß, Simon & Jaimovich, Dany & Schündeln, Matthias, 2021. "Environmental effects of development programs: Experimental evidence from West African dryland forests," Journal of Development Economics, Elsevier, vol. 153(C).

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    More about this item

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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