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Economic Growth, Inequality, Democratization, and the Environment

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  • Clas Eriksson

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  • Joakim Persson

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Abstract

We augment the Stokey (1998) model by allowingagents to differ with respect to environmentalquality and income in order to analyze theimpact of income and environmental inequality,and of democratization on aggregate pollution.We find that the impact of a more equal incomedistribution depends on the degree ofdemocracy. In a complete democracy a more equalincome distribution generates, ceterisparibus, less pollution, which is consistentwith indirect empirical evidence, whereas theopposite is the case if democratic rights arehighly restricted. Furthermore, ademocratization is argued to typically lowerboth the income and the environmental qualityof the median voter. In this case, if, inutility terms, the fall in environmentalquality is worse than the fall in consumptionthe median voter decides to tightenenvironmental legislation so that aggregatepollution decreases. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Clas Eriksson & Joakim Persson, 2003. "Economic Growth, Inequality, Democratization, and the Environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(1), pages 1-16, May.
  • Handle: RePEc:kap:enreec:v:25:y:2003:i:1:p:1-16
    DOI: 10.1023/A:1023658725021
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    References listed on IDEAS

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    Cited by:

    1. Dutta, Dilip & Ghosh, Paritosh Chandra, 2003. "Re-examining Economic Growth-Environment Relationship: Evidence from High-, Medium- And Low-Income Countries," Working Papers 3, University of Sydney, School of Economics.
    2. Francesco Vona & Francesco Nicolli, 2013. "Energy market liberalisation and renewable energy policies in OECD countries," Working Papers hal-00973070, HAL.
    3. Sophie Bernard & Louis Hotte & Stanley L. Winer, 2010. "Democracy, Inequality and the Environment when Citizens can Mitigate Privately or Act Collectively," CESifo Working Paper Series 3241, CESifo Group Munich.
    4. Drosdowski, Thomas, 2005. "Democracy Deficits, Inequality and Pollution. A Politico-Economic Analysis," Hannover Economic Papers (HEP) dp-323, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. Lundborg, Per, 2005. "Wage Fairness, Growth and the Utilization of R&D Workers," Working Paper Series 206, Trade Union Institute for Economic Research.
    6. Kristrom, Bengt & Lundgren, Tommy, 2005. "Swedish CO2-emissions 1900-2010: an exploratory note," Energy Policy, Elsevier, vol. 33(9), pages 1223-1230, June.
    7. Kinda, Romuald, 2010. "Democratic institutions and environmental quality: effects and transmission channels," MPRA Paper 27455, University Library of Munich, Germany.
    8. Francesco Nicolli & Francesco Vona, 2012. "The evolution of renewable energy policy in OECD countries: aggregate indicators and determinants," Sciences Po publications 2012-13, Sciences Po.
    9. Baozhi Qu & Yifan Zhang, 2011. "Effect Of Income Distribution On The Environmental Kuznets Curve," Pacific Economic Review, Wiley Blackwell, vol. 16(3), pages 349-370, August.
    10. Drosdowski, Thomas, 2006. "Does Democratization Benefit the Environment in the Long-Run in the Presence of Inequality?," Hannover Economic Papers (HEP) dp-347, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    11. Clas Eriksson & Joakim Persson, 2013. "Democracy, income and pollution," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(3), pages 291-308, July.
    12. Lundborg, Per, 2005. "Wage Theories for the Swedish Labour Market," Working Paper Series 207, Trade Union Institute for Economic Research.
    13. Bernard, Sophie & Hotte, Louis & Winer, Stanley L., 2014. "Democracy, inequality and the environment when citizens can mitigate health consequences of pollution privately or act collectively," European Journal of Political Economy, Elsevier, vol. 34(C), pages 142-156.
    14. Hadjiyiannis Costas & İriş Doruk & Tabakis Chrysostomos, 2012. "International Environmental Cooperation under Fairness and Reciprocity," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-30, August.
    15. Fredriksson, Per G. & Neumayer, Eric, 2013. "Democracy and climate change policies: Is history important?," Ecological Economics, Elsevier, vol. 95(C), pages 11-19.
    16. Laura Marsiliani & Thomas I Renstrom, 2005. "Political Institutions, Environmental Policy and Growth," Money Macro and Finance (MMF) Research Group Conference 2005 38, Money Macro and Finance Research Group.
    17. Selén, Jan & Ståhlberg, Ann-Charlotte, 2004. "Wage and Compensation Inequality — How Different?," Working Paper Series 197, Trade Union Institute for Economic Research.
    18. Hotte, Louis & Winer, Stanley L., 2012. "Environmental regulation and trade openness in the presence of private mitigation," Journal of Development Economics, Elsevier, vol. 97(1), pages 46-57.
    19. 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.
    20. Drosdowski, Thomas, 2006. "On the Link Between Democracy and Environment," Hannover Economic Papers (HEP) dp-355, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    21. R. Quentin Grafton & Stephen Knowles, 2002. "Social Capital and National Environmental Performance: A Cross-sectional Analysis," Economics and Environment Network Working Papers 0206, Australian National University, Economics and Environment Network.

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