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Pollution and the State: The Role of the Structure of Government

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  • Lopez, Ramon E.
  • Galinato, Gregmar I.
  • Islam, Asif M.

Abstract

Government spending has significant environmental implications. This paper analyzes the effect of the allocation of government spending between public goods broadly defined and private goods or non-social subsidies on air and water pollution. The theoretical model predicts that a reallocation of expenditures from private subsidies to public goods improves environmental quality by reducing production pollution. We estimate an empirical model that shows that such a reallocation causes a significant reduction in air pollutants namely sulfur dioxide and lead and an improvement in water quality measures including dissolved oxygen and biological oxygen demand.

Suggested Citation

  • Lopez, Ramon E. & Galinato, Gregmar I. & Islam, Asif M., 2009. "Pollution and the State: The Role of the Structure of Government," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48055, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare09:48055
    DOI: 10.22004/ag.econ.48055
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    References listed on IDEAS

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    Cited by:

    1. López, Ramón E. & Yoon, Sang W., 2014. ""Sustainable" Economic Growth: The Ominous Potency of Structural Change," International Review of Environmental and Resource Economics, now publishers, vol. 7(2), pages 179-203, July.

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