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Environmental Federalism and Atmospheric Pollution: Efficacy of Local vs State Expenditure

In: Vanishing Borders of Urban Local Finance

Author

Listed:
  • Shyam Nath

    (Amrita Vishwa Vidyapeetham University)

  • Yeti Nisha Madhoo

    (Amrita Vishwa Vidyapeetham University)

Abstract

This chapter empirically tests the suitability of local vs state government expenditure in providing an environmental public good, namely airborne pollution control in two municipal areas in India. We employ an innovative methodology where factual and counterfactual state and local expenditure regimes are constructed to capture different degrees of decentralization. Econometric results highlight higher efficacy of state-level expenditure (centralization) as spillover/regional effects become important. Particularly, superiority of state expenditure is evident in the control of suspended particulate matter (SPM), which has wide cross-boundary effects. Local expenditure and the counterfactual of local expenditure for uniform provision (both decentralized provision modes) emerge as more effective than state to control point-source local pollutant sulphur dioxide (SO2). However, they may also supplement the effects generated by state expenditure in the case of nitrogen dioxide (NO2) emissions, which entail spillovers and seem amenable to pressure group influence at local level.

Suggested Citation

  • Shyam Nath & Yeti Nisha Madhoo, 2022. "Environmental Federalism and Atmospheric Pollution: Efficacy of Local vs State Expenditure," Springer Books, in: Vanishing Borders of Urban Local Finance, chapter 0, pages 263-296, Springer.
  • Handle: RePEc:spr:sprchp:978-981-19-5300-2_9
    DOI: 10.1007/978-981-19-5300-2_9
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