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Economic Growth, Inequality, Democratization, and the Environment

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Author Info
Eriksson, Clas () (Department of Economics)
Persson, Joakim (Trade Union Institute for Economic Research)
Abstract

We augment the Stokey (1998) model by allowing agents to differ with respect to environmental quality and income in order to analyze the impact of income and environmental inequality, and of democratization on aggregate pollution. We find that the impact of a more equal income distribution depends on the degree of democracy. In a complete democracy a more equal income distribution generates, ceteris paribus, less pollution, which is consistent with indirect empirical evidence, whereas the opposite is the case if democratic rights are highly restricted. Further-more, a democratization is argued to typically lower both the income and the environmental quality of the median voter. In this case, if, in utility terms, the fall in environmental quality is worse than the fall in consumption the median voter decides to tighten environmental legislation so that aggregate pollution decreases.

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Publisher Info
Paper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 178.

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Length: 21 pages
Date of creation: 16 Aug 2002
Date of revision:
Publication status: Published in Environmental and Resource Economics, 2003, pages 1-16.
Handle: RePEc:hhs:fiefwp:0178

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Related research
Keywords: Economic growth and the environment; inequality; politics;

Find related papers by JEL classification:
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General

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  7. Andreoni, James & Levinson, Arik, 2001. "The simple analytics of the environmental Kuznets curve," Journal of Public Economics, Elsevier, vol. 80(2), pages 269-286, May. [Downloadable!] (restricted)
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