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Corruption, Inequality, and Environmental Regulation

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Author Info

  • Jie He

    ()
    (GREDI, Département d'économique, Université de Sherbrooke)

  • Paul MAKDISSI

    ()
    (Departement d’´economique and CEREF, Universite de Sherbrooke, 2550 boulevard de l’Universite, Sherbrooke, Québec, Canada, J1K 2R1)

  • Quentin WODON

    ()
    (LCSPR, World Bank, 1818 H Street, NW, Washington, DC 20433, USA)

Abstract

We develop two public choice models in which environmental regulation is determined endogenously in the presence of agents who are heterogenous in wealth or income. In the first model, regulation is determined by a majority vote, and an increase in inequality induces an increase in environmental standard. In the second model, the environmental standard is chosen by a corrupt bureaucrat. In that model, while the impact of an increase in inequality on the environmental standard is uncertain, a higher level of corruption always reduces the quality of environmental regulation. An empirical analysis using cross-country data confirms the implication of both models.

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File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0713.pdf
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Bibliographic Info

Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 07-13.

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Length: 40 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:shr:wpaper:07-13

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Keywords: Environmental regulation; corruption; inequality;

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References

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Cited by:
  1. José-Antonio Monteiro & Madina Kukenova, 2008. "Does Lax Environmental Regulation Attract FDI When Accounting For "Third-Country" Effects?," IRENE Working Papers 08-01, IRENE Institute of Economic Research.
  2. Matthieu Clement & Andre Meunie, 2010. "Is Inequality Harmful for the Environment? An Empirical Analysis Applied to Developing and Transition Countries," Review of Social Economy, Taylor & Francis Journals, vol. 68(4), pages 413-445.

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