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Cooperation in Environmental Policy: A Spatial Approach

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  • Ronald B. Davies

    ()
    (University of Oregon Economics Department)

  • Helen T. Naughton

    ()
    (University of Oregon Economics Department)

Abstract

Inefficient competition in emissions taxes creates benefits from international cooperation. In the presence of cross-border pollution, proximate (neighboring) countries may have greater incentives to cooperate than distant ones as illustrated by a model of tax competition for mobile capital. Spatial econometrics is used to estimate participation in 37 international environmental treaties. Data on 41 countries from 1980-1999 reveal evidence of increased cooperation among proximate countries. Furthermore, the results indicate that FDI usually increases treaty participation. We also find that both OECD and non-OECD countries respond positively to OECD countriesÂ’ participation but the response to non-OECD countries is primarily from similar countries. This suggests that the rich countries may lead others in setting environmental quality.

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Bibliographic Info

Paper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2006-18.

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Length: 46
Date of creation: 10 Apr 2003
Date of revision: 10 Jun 2003
Handle: RePEc:ore:uoecwp:2006-18

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Related research

Keywords: Environmental agreements; foreign direct investment; spatial econometrics;

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Cited by:
  1. Ronald B. Davies & Krishna Chaitanya Vadlamannati, 2011. "A Race to the Bottom in Labour Standards? An Empirical Investigation," The Institute for International Integration Studies Discussion Paper Series iiisdp385, IIIS.
  2. Cizek, P. & Lei, J. & Ligthart, J.E., 2012. "The Determinants of VAT Introduction: A Spatial Duration Analysis," Discussion Paper 2012-071, Tilburg University, Center for Economic Research.
  3. Peter Egger & Christoph Jeßberger & Mario Larch, 2011. "Trade and investment liberalization as determinants of multilateral environmental agreement membership," International Tax and Public Finance, Springer, vol. 18(6), pages 605-633, December.
  4. Krishna Chaitanya Vadlamannati & Arusha Cooray, 2012. "What Drives FDI Policy Liberalization? An Empirical Investigation," CAMA Working Papers 2012-27, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  5. Cho, Seo-young & Vadlamannati, Krishna Chaitanya, 2010. "Compliance for big brothers: An empirical analysis on the impact of the anti-trafficking protocol," Center for European, Governance and Economic Development Research Discussion Papers 118, University of Goettingen, Department of Economics.
  6. Libman, Alexander & Ushkalova, Daria, 2009. "Post-Soviet countries in global and regional institutional competition: The case of Kazakhstan," MPRA Paper 12595, University Library of Munich, Germany.

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