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Debt, democratization, and development in Latin America: How policy can affect global warming

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  • René W. Aubourg

    (American University)

  • David H. Good

    (Indiana University)

  • Kerry Krutilla

    (Indiana University)

Abstract

The environmental Kuznets curve (EKC) hypothesis conjectures a nonlinear relationship between pollution and economic growth, such that pollution per capita initially increases as countries economically develop, but then reaches a maximum point before ultimately declining. Much of the EKC literature has focused on testing this basic hypothesis and, in studies that find evidence of an EKC, estimating the “turning point” level of development at which the per capita pollution-growth relationship changes sign. This approach has not emphasized the policy relevance of specification issues or the potential role of policy variables. This research explores a modified EKC specification which conditions the pollution-growth relationship on a country's level of debt and degree of democratization. These variables turn out to be significant, implying that different political and economic contexts can shift EKCs and their turning points. These findings suggest that policies to relieve debt burdens and institute political reform, in addition to their usual justifications, also could be used as a strategy to reduce carbon emissions from developing countries. © 2008 by the Association for Public Policy Analysis and Management.

Suggested Citation

  • René W. Aubourg & David H. Good & Kerry Krutilla, 2008. "Debt, democratization, and development in Latin America: How policy can affect global warming," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(1), pages 7-19.
  • Handle: RePEc:wly:jpamgt:v:27:y:2008:i:1:p:7-19 DOI: 10.1002/pam.20304
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    References listed on IDEAS

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    12. Alun H. Thomas, 2006. "Do Debt-Service Savings and Grants Boost Social Expenditures?," IMF Working Papers 06/180, International Monetary Fund.
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    Cited by:

    1. Jale Tosun & Christoph Knill, 2011. "The Differential Impact of Economic Integration on Environmental Policy," Chapters,in: International Handbook on the Economics of Integration, Volume III, chapter 12 Edward Elgar Publishing.

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