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National politics and international agreements

Author

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  • Kempf, Hubert
  • Rossignol, Stéphane

Abstract

In this paper we set up a political economy model of a two-country world economy, where an international agreement on the provisions of public goods generating cross-border externalities, such as environment protection, subject to feasibility, efficiency and equity constraints, has to be negotiated by two elected national delegates. We prove that any international agreement involves higher public good provisions (through higher contributions in both countries) than in the case of no-agreement. If feasible, an IA may generate losers in either country. Under an equal tax rate rule, an international agreement may or may not be reached, unlike under an equal gain rule. Turning to the election stage, depending on the type of equity rule imposed on the IA, the choice of delegates depends crucially on distributive characteristics, both between and within countries: this is due to the struggle by electorates to transfer the tax burden to the other country's taxpayers.

Suggested Citation

  • Kempf, Hubert & Rossignol, Stéphane, 2013. "National politics and international agreements," Journal of Public Economics, Elsevier, vol. 100(C), pages 93-105.
  • Handle: RePEc:eee:pubeco:v:100:y:2013:i:c:p:93-105
    DOI: 10.1016/j.jpubeco.2012.12.005
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    References listed on IDEAS

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    1. Hubert Kempf & Stéphane Rossignol, 2007. "Is Inequality Harmful For The Environment In A Growing Economy?," Economics and Politics, Wiley Blackwell, vol. 19(1), pages 53-71, March.
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    Citations

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    Cited by:

    1. Andreas Freytag & Leo Wangler, 2008. "Strategic Trade Policy als Response to Climate Change? The Political Economy of Climate Policy," Jena Economic Research Papers 2008-001, Friedrich-Schiller-University Jena.
    2. Habla, Wolfgang & Winkler, Ralph, 2018. "Strategic delegation and international permit markets: Why linking May fail," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 244-250.
    3. Leo Wangler & Juan-Carlos Altamirano-Cabrera & Hans-Peter Weikard, 2013. "The political economy of international environmental agreements: a survey," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 13(3), pages 387-403, September.
    4. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    5. Habla, Wolfgang & Winkler, Ralph, 2015. "Strategic Delegation and Non-cooperative International Permit Markets," Working Papers in Economics 636, University of Gothenburg, Department of Economics.
    6. Habla, Wolfgang & Winkler, Ralph, 2018. "Strategic delegation and international permit markets: Why linking May fail," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 244-250.
    7. Loeper, Antoine, 2017. "Cross-border externalities and cooperation among representative democracies," European Economic Review, Elsevier, vol. 91(C), pages 180-208.
    8. Geum Soo Kim, 2013. "Lobbies Competition and Bilateral International Environmental Agreements," Korean Economic Review, Korean Economic Association, vol. 29, pages 81-96.

    More about this item

    Keywords

    International agreements; Strategic delegation; Voting; Median voter;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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