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Legislative Organization and Pollution Taxation

  • Per Fredriksson


  • Daniel Millimet

The role of political institutions in shaping public policy has been analyzed in isolation from corruption, and legislative organization (specifically, bicameralism) has received minimal attention. We analyze pollution taxation when decisions are influenced by several veto players, such as legislative chambers. Our theory predicts that an increase in the number of veto players (e.g., moving from uni- to bi-cameralism) pushes the pollution tax towards the social optimum, with the effect being conditional on corruption. As such, dispersion around the optimal tax is lower under bicameralism. Empirical tests – using data from 86 countries – support the theory. Copyright Springer Science+Business Media, LLC 2007

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Article provided by Springer in its journal Public Choice.

Volume (Year): 131 (2007)
Issue (Month): 1 (April)
Pages: 217-242

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Handle: RePEc:kap:pubcho:v:131:y:2007:i:1:p:217-242
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