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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
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    References listed on IDEAS

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    1. Lopez Ramon, 1994. "The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 163-184, September.
    2. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    3. Antonio Estache & Vitor Gaspar, 1995. "Why Tax Incentives Don't Promote Investment in Brazil," ULB Institutional Repository 2013/44076, ULB -- Universite Libre de Bruxelles.
    4. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    5. William T. Harbaugh & Arik Levinson & David Molloy Wilson, 2002. "Reexamining The Empirical Evidence For An Environmental Kuznets Curve," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 541-551, August.
    6. Lopez, Ramon, 2003. "The Policy Roots of Socioeconomic Stagnation and Environmental Implosion: Latin America 1950-2000," World Development, Elsevier, vol. 31(2), pages 259-280, February.
    7. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January.
    8. Charles Grant, 2007. "Estimating credit constraints among US households," Oxford Economic Papers, Oxford University Press, vol. 59(4), pages 583-605, October.
    9. Alberto Chong & Mark Gradstein, 2007. "Inequality and Institutions," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 454-465, August.
    10. Barrett, Scott & Graddy, Kathryn, 2000. "Freedom, growth, and the environment," Environment and Development Economics, Cambridge University Press, vol. 5(04), pages 433-456, October.
    11. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 353-377.
    12. Ben Arimah, 2004. "Poverty Reduction and Human Development in Africa," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 5(3), pages 399-415.
    13. Deacon, Robert & Norman, Catherine S, 2004. "Is the environmental Kuznets curve an empirical regularity?," University of California at Santa Barbara, Economics Working Paper Series qt2m44f7kr, Department of Economics, UC Santa Barbara.
    14. Lopez, Ramon E. & Islam, Asif M., 2008. "When Government Spending Serves the Elites: Consequences for Economic Growth in a Context of Market Imperfections," Working Papers 45875, University of Maryland, Department of Agricultural and Resource Economics.
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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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