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Is inequality harmful for the environment in a growing economy ?

  • Hubert Kempf


    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

  • Stéphane Rossignol


    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, UVSQ - Université de Versailles Saint-Quentin-en-Yvelines)

In this paper we investigate the relationship between inequality and the environment in a growing economy from a political economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is done in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment : the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00117046.

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Date of creation: May 2006
Date of revision:
Publication status: Published in Cahiers de la Maison des Sciences Economiques 2006.45 - ISSN 1624-0340. 2006
Handle: RePEc:hal:cesptp:halshs-00117046
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  1. Magnani, Elisabetta, 2000. "The Environmental Kuznets Curve, environmental protection policy and income distribution," Ecological Economics, Elsevier, vol. 32(3), pages 431-443, March.
  2. Aghion, Philippe & Caroli, Eve & Garcia-Penalosa, Cecilia, 1999. "Inequality and economic growth: the perspective of the new growth theories," CEPREMAP Working Papers (Couverture Orange) 9908, CEPREMAP.
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  12. Hubert Kempf & Stéphane Rossignol, 2005. "Growth, Inequality, and Integration: A Political Economy Analysis," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 709-739, December.
  13. James Andreoni & Arik Levinson, 1998. "The Simple Analytics of the Environmental Kuznets Curve," NBER Working Papers 6739, National Bureau of Economic Research, Inc.
  14. Kahn, Matthew E & Matsusaka, John G, 1997. "Demand for Environmental Goods: Evidence from Voting Patterns on California Initiatives," Journal of Law and Economics, University of Chicago Press, vol. 40(1), pages 137-73, April.
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  16. van Marrewijk, Charles & van der Ploeg, Federick & Verbeek, Jos, 1993. "Is growth bad for the environment? Pollution, abatement, and endogenous growth," Policy Research Working Paper Series 1151, The World Bank.
  17. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  18. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
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