Advanced Search
MyIDEAS: Login to save this paper or follow this series

Political competition within and between parties: An application to environmental policy

Contents:

Author Info

  • Helmut Cremer

    ()
    (Groupe de Recherche en Economie Mathématique et Quantitative, INRA
    Université Toulouse 1)

  • Philippe De Donder

    ()
    (Groupe de Recherche en Economie Mathématique et Quantitative, INRA
    Centre National de la Recherche Scientifique)

  • Gahvari Firouz

    (Department of Economics, University of Illinois)

Abstract

This paper presents a political economy model that is consistent with the low rate of emission taxes in the U.S., as well as the fact that neither Democrats nor Republicans propose to increase them. The voters differ according to their wage and capital incomes. They vote over the emission tax rate and a budgetary rule that specifies how to redistribute the tax proceeds. The political competition is modeled à la Roemer [Roemer, J., 2001. Political Competition: Theory and Applications. Harvard University Press] where the two parties care for the policies they propose as well as the probability of winning; the equilibrium solution concept is the Party Unanimity Nash Equilibrium (PUNE). We calibrate the model using U.S. data and compute the PUNEs numerically. Two types of PUNEs emerge. In one, reflecting the preferences of the militants in the two parties, equilibrium is characterized by both parties proposing a very huge tax rate, with Democrats typically beating the Republicans. In the other, dictated more by the concerns of the opportunists who care most about winning elections, both offer subsidies and both have a chance to win the election.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://gateway.isiknowledge.com/gateway/Gateway.cgi?&GWVersion=2&SrcAuth=INRA&SrcApp=INRA&DestLinkType=FullRecord&DestApp=WOS&KeyUT=WOS:000254397600008
Download Restriction: no

Bibliographic Info

Paper provided by Institut National de la Recherche Agronomique, France in its series Working Papers with number 18963.

as in new window
Length: online
Date of creation: 2007
Date of revision:
Publication status: Published in Journal of Public Economics
Handle: RePEc:inr:wpaper:18963

Note: JEL : H23 ; D72
Contact details of provider:
Postal: 4, Allée Adolphe Bobierre, CS 61103, 35011 Rennes Cedex
Email:
Web page: http://www.international.inra.fr
More information through EDIRC

Related research

Keywords: EMISSION TAXES; POLITICAL COMPETITION; PUNE; DISTRIBUTIONAL CONCERNS; POLITICAL COMPROMISE;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Cremer, Helmuth & De Donder, Philippe & Gahvari, Firouz, 2005. "Political Competition within and between Parties: An Application to Environmental Policy," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 358, Institut d'Économie Industrielle (IDEI), Toulouse.
  2. Massimo Filippini, 1999. "Swiss residential demand for electricity," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 6(8), pages 533-538.
  3. Marsiliani, Laura & Renstrom, Thomas I, 2000. "Time Inconsistency in Environmental Policy: Tax Earmarking as a Commitment Solution," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(462), pages C123-38, March.
  4. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, Springer, vol. 52(3), pages 273-297, January.
  5. Helmuth Cremer & Philippe De Donder & Firouz Gahvari, 2004. "Taxes, Budgetary Rule and Majority Voting," Public Choice, Springer, Springer, vol. 119(3_4), pages 335-358, 06.
  6. Laslier, Jean-Francois & Picard, Nathalie, 2002. "Distributive Politics and Electoral Competition," Journal of Economic Theory, Elsevier, Elsevier, vol. 103(1), pages 106-130, March.
  7. Marcel Boyer & Jean-Jacques Laffont, 1999. "Toward a Political Theory of the Emergence of Environmental Incentive Regulation," RAND Journal of Economics, The RAND Corporation, vol. 30(1), pages 137-157, Spring.
  8. Helmuth Cremer & Philippe De Donder & Firouz Gahvari, 2004. "Political Sustainability and the Design of Environmental Taxes," International Tax and Public Finance, Springer, Springer, vol. 11(6), pages 703-719, November.
  9. Bos, Dieter, 2000. "Earmarked taxation: welfare versus political support," Journal of Public Economics, Elsevier, Elsevier, vol. 75(3), pages 439-462, March.
  10. E. Raphael Branch, 1993. "Short Run Income Elasticity of Demand for Residential Electricity Using Consumer Expenditure Survey Data," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 4), pages 111-122.
  11. Brett, Craig & Keen, Michael, 2000. "Political uncertainty and the earmarking of environmental taxes," Journal of Public Economics, Elsevier, Elsevier, vol. 75(3), pages 315-340, March.
  12. John E. Roemer, 1997. "The Democratic Political Economy of Progressive Income Taxation," Discussion Papers 97-03, University of Copenhagen. Department of Economics.
  13. Cremer Helmuth & De Donder Philippe & Gahvari Firouz, 2007. "Energy Taxes in Three Political Economy Models," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 7(1), pages 1-29, July.
  14. Cremer, Helmuth & Gahvari, Firouz & Ladoux, Norbert, 2003. "Environmental taxes with heterogeneous consumers: an application to energy consumption in France," Journal of Public Economics, Elsevier, Elsevier, vol. 87(12), pages 2791-2815, December.
  15. Fullerton, Don, 1991. "Reconciling Recent Estimates of the Marginal Welfare Cost of Taxation," American Economic Review, American Economic Association, American Economic Association, vol. 81(1), pages 302-08, March.
  16. James M. Poterba, 1991. "Tax Policy to Combat Global Warming: On Designing a Carbon Tax," NBER Working Papers 3649, National Bureau of Economic Research, Inc.
  17. Levy, Gilat, 2004. "A model of political parties," Journal of Economic Theory, Elsevier, Elsevier, vol. 115(2), pages 250-277, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:inr:wpaper:18963. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Administrateur de ProdInra).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.