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Does a stricter enforcement policy protect the environment? A political economy perspective

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  • Cheng, Chu-Chuan
  • Lai, Yu-Bong

Abstract

The conventional wisdom suggests that a stricter enforcement policy can reduce pollution emissions. Nevertheless, this present paper argues that this assertion does not necessarily hold if the stringency of environmental regulation is subject to the influence of lobbying. A stricter enforcement policy increases the polluters’ expected financial burden, and induces them to exert greater political pressure on reducing the stringency of environmental regulation, thereby resulting in a larger amount of pollution emissions. We also show that tightening the enforcement policy can reduce efficiency. We highlight the possibility of policymaking being misguided due to overlooking the political effect of enforcement policy.

Suggested Citation

  • Cheng, Chu-Chuan & Lai, Yu-Bong, 2012. "Does a stricter enforcement policy protect the environment? A political economy perspective," Resource and Energy Economics, Elsevier, vol. 34(4), pages 431-441.
  • Handle: RePEc:eee:resene:v:34:y:2012:i:4:p:431-441
    DOI: 10.1016/j.reseneeco.2012.04.003
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:resene:v:48:y:2017:i:c:p:83-97 is not listed on IDEAS
    2. Menegaki, Angeliki N. & Ozturk, Ilhan, 2013. "Growth and energy nexus in Europe revisited: Evidence from a fixed effects political economy model," Energy Policy, Elsevier, vol. 61(C), pages 881-887.

    More about this item

    Keywords

    Asymmetric information; Compliance; Enforcement policy; Environmental policy; Interest groups; Lobbying; Political economy;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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