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Environmental Protection With Policies For Sale

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  • Schleich, Joachim

Abstract

This paper generalizes the Grossman-Helpman political economy model to characterize the structure of environmental and industry protection for a small open economy when domestic and/or trade policies are the outcome of a noncooperative common agency game between sector-specific producer lobbies and the government. For a consumption externality, the political equilibrium results if domestic and trade policies are available, are production-enhancing protection of organized industries, but the same environmental protection as Pigouvian taxes. Subsidies to organized industries counterbalance environmental taxes when there is a production externality, and it is ambiguous whether domestic or trade policy alone leads to more environmental protection. In addition, this paper demonstrates that the original Grossman-Helpman results arise as a special case that rests on the assumption that only trade policies are available to the government.

Suggested Citation

  • Schleich, Joachim, 1997. "Environmental Protection With Policies For Sale," Working Papers 51207, International Agricultural Trade Research Consortium.
  • Handle: RePEc:ags:iatrwp:51207
    DOI: 10.22004/ag.econ.51207
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    Citations

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    Cited by:

    1. Uhr, Daniel & Ziero Uhr, Júlia & Mueller, Bernardo, 2012. "Como as ONGs ambientais influenciam a política ambiental brasileira?," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 66(1), March.
    2. Laing, Timothy & Palmer, Charles, 2015. "Economy-wide impacts of REDD when there is political influence," Resource and Energy Economics, Elsevier, vol. 40(C), pages 107-126.
    3. Aidt, Toke S., 1998. "Political internalization of economic externalities and environmental policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 1-16, July.
    4. repec:fgv:epgrbe:v:66:n:1:a:4 is not listed on IDEAS
    5. Per G. Fredriksson, 1999. "The Political Economy of Trade Liberalization and Environmental Policy," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 513-525, January.

    More about this item

    Keywords

    Environmental Economics and Policy;

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