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Democracy Deficits, Inequality and Pollution. A Politico-Economic Analysis

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  • Drosdowski, Thomas
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    Abstract

    The article examines conditions, under which the degree of democratization influences environmental policy outcomes, with a given resource endowments' heterogeneity as a crucial feature of a politico-economic process. We develop an OLG model with pollution as an aggregate externality. The decisive voter, whose income can differ from the median one, chooses redistribution to finance abatement. By comparing the optimal taxation under alternative political regimes we analyze their implications for environment, efficiency and growth. We find that left regimes, choosing more progressive redistribution, maintain better environmental quality, which supports empirical research. Inequality does not appear to be harmful for the environment, and it dampens the effect of democracy imperfections on redistribution.

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    File URL: http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-323.pdf
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    Bibliographic Info

    Paper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Hannover Economic Papers (HEP) with number dp-323.

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    Length: 29 pages
    Date of creation: Oct 2005
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    Handle: RePEc:han:dpaper:dp-323

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    Keywords: pollution; political economy; inequality; redistribution; growth;

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