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Decentralization and Environmental Quality: An International Analysis of Water Pollution

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Author Info
Hilary Sigman

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Abstract

Many arguments about decentralization in public goods provision have testable implications for the relationship between decentralization and the level and spatial variability of public goods. This paper explores the empirical relationship between decentralization and environmental public good, water quality in rivers at monitoring stations around the world. It examines pollution levels and spatial variability of pollution within a country for both a local and a regional pollutant. The results suggest higher pollution levels with greater decentralization when fixed effects are included; the evidence is strongest for the regional pollutant, where it might result from interjurisdictional free riding. Federalism is associated with greater spatial variability in pollution within a country, consistent with the traditional view that decentralization allows policies more tailored to local conditions.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13098.

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Date of creation: May 2007
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Handle: RePEc:nbr:nberwo:13098

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Find related papers by JEL classification:
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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  1. Sigman, Hilary, 2005. "Transboundary spillovers and decentralization of environmental policies," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 82-101, July. [Downloadable!] (restricted)
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  2. Bowman Cutter, W. & DeShazo, J.R., 2007. "The environmental consequences of decentralizing the decision to decentralize," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 32-53, January. [Downloadable!] (restricted)
  3. Daniel L. Millimet, 2003. "Assessing the Empirical Impact of Environmental Federalism," Journal of Regional Science, Blackwell Publishing, vol. 43(4), pages 711-733. [Downloadable!] (restricted)
  4. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December. [Downloadable!] (restricted)
  5. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier. [Downloadable!] (restricted)
  6. Gray, Wayne B. & Shadbegian, R.J.Ronald J., 2004. "'Optimal' pollution abatement--whose benefits matter, and how much?," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 510-534, May. [Downloadable!] (restricted)
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  7. John A. List & Shelby Gerking, 2000. "Regulatory Federalism and Environmental Protection in the United States," Journal of Regional Science, Blackwell Publishing, vol. 40(3), pages 453-471. [Downloadable!] (restricted)
  8. Hilary Sigman, 2002. "International Spillovers and Water Quality in Rivers: Do Countries Free Ride?," American Economic Review, American Economic Association, vol. 92(4), pages 1152-1159, September. [Downloadable!] (restricted)
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  9. Barrett, Scott & Graddy, Kathryn, 2000. "Freedom, growth, and the environment," Environment and Development Economics, Cambridge University Press, vol. 5(04), pages 433-456, November. [Downloadable!]
  10. Lockwood, Ben, 2002. "Distributive Politics and the Costs of Centralization," Review of Economic Studies, Blackwell Publishing, vol. 69(2), pages 313-37, April.
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  11. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September. [Downloadable!] (restricted)
  12. Silva, Emilson C. D. & Caplan, Arthur J., 1997. "Transboundary Pollution Control in Federal Systems," Journal of Environmental Economics and Management, Elsevier, vol. 34(2), pages 173-186, October. [Downloadable!] (restricted)
  13. Hilary Sigman, 2003. "Letting States do the Dirty Work: State Responsibility for Federal Environmental Regulation," NBER Working Papers 9451, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Congleton, Roger D, 1992. "Political Institutions and Pollution Control," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 412-21, August. [Downloadable!] (restricted)
  15. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April. [Downloadable!] (restricted)
  16. Kunce, Mitch & Shogren, Jason F., 2005. "On interjurisdictional competition and environmental federalism," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 212-224, July. [Downloadable!] (restricted)
  17. Arik Levinson, . "Environmental Regulatory Competition: A Status Report and Some New Evident," Working Papers gueconwpa~02-02-07, Georgetown University, Department of Economics. [Downloadable!]
  18. Helland, Eric & Whitford, Andrew B., 2003. "Pollution incidence and political jurisdiction: evidence from the TRI," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 403-424, November. [Downloadable!] (restricted)
  19. 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. [Downloadable!] (restricted)
  20. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March. [Downloadable!] (restricted)
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  21. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June. [Downloadable!] (restricted)
  22. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May. [Downloadable!] (restricted)
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  23. Koleman S. Strumpf & Felix Oberholzer-Gee, 2002. "Endogenous Policy Decentralization: Testing the Central Tenet of Economic Federalism," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 1-36, February. [Downloadable!] (restricted)
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