Is Inequality Harmful For The Environment In A Growing Economy?
In this paper, we investigate the relationship between inequality and the environment in a growing economy from a political-economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is made in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment: the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth. Copyright 2007 Blackwell Publishing Ltd..
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Volume (Year): 19 (2007)
Issue (Month): 1 (03)
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