IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper

Centralization and accountability: theory and evidence from the Clean Air Act

  • Federico Boffa

    ()

    (Università di Macerata & IEB)

  • Amedeo Piolatto

    ()

    (Universitat de Barcelona & IEB)

  • Giacomo A. M. Ponzetto

    ()

    (CREI, Universitat Pompeu Fabra & Barcelona GSE)

This paper studies fiscal federalism when voter information varies across regions. We develop a model of political agency with heterogeneously informed voters. Rent-seeking politicians provide public goods to win the votes of the informed. As a result, rent extraction is lower in regions with higher information. In equilibrium, electoral discipline has decreasing returns. Thus, political centralization efficiently reduces aggregate rent extraction. The model predicts that a region’s benefits from centralization are decreasing in its residents’ information. We test this prediction using panel data on pollutant emissions across U.S. states. The 1970 Clean Air Act centralized environmental policy at the federal level. In line with our theory, we find that centralization induced a differential decrease in pollution for uninformed relative to informed states.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.ieb.ub.edu/aplicacio/fitxers/2012/5/Doc2012-14.pdf
Download Restriction: no

Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2012/14.

as
in new window

Length: 46 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:ieb:wpaper:2012/5/doc2012-14
Contact details of provider: Postal:
Carrer del Tinent Coronel Valenzuela 1-11, 08034 Barcelona

Phone: 93 403 46 46
Fax: 93 403 98 32
Web page: http://www.ieb.ub.edu
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Durante, Ruben & Labartino, Giovanna & Perotti, Roberto, 2011. "Academic Dynasties: Decentralization and Familism in the Italian Academia," CEPR Discussion Papers 8645, C.E.P.R. Discussion Papers.
  2. Ponzetto, Giacomo AM, 2011. "Heterogeneous Information and Trade Policy," CEPR Discussion Papers 8726, C.E.P.R. Discussion Papers.
  3. Edward L. Glaeser & Giacomo A. M. Ponzetto & Jesse M. Shapiro, 2004. "Strategic Extremism: Why Republicans and Democrats Divide on Religious Values," Harvard Institute of Economic Research Working Papers 2044, Harvard - Institute of Economic Research.
  4. Olivier Blanchard & Andrei Shleifer, 2001. "Federalism With and Without Political Centralization: China Versus Russia," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 8.
  5. Patrick Bayer & Nathaniel Keohane & Christopher Timmins, 2006. "Migration and Hedonic Valuation: The Case of Air Quality," NBER Working Papers 12106, National Bureau of Economic Research, Inc.
  6. Jean, HINDRIKS & Ben, Lockwood, 2005. "Decentralization and Electoral Accountability : Incentives, Separation and Vote Welfare," Discussion Papers (ECON - Département des Sciences Economiques) 2005038, Université catholique de Louvain, Département des Sciences Economiques, revised 15 Mar 2005.
  7. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
  8. Alesina, Alberto F & Angeloni, Ignazio & Etro, Federico, 2003. "International Unions," CEPR Discussion Papers 3913, C.E.P.R. Discussion Papers.
  9. Del Monte, Alfredo & Papagni, Erasmo, 2001. "Public expenditure, corruption, and economic growth: the case of Italy," European Journal of Political Economy, Elsevier, vol. 17(1), pages 1-16, March.
  10. Dincecco,Mark, 2011. "Political Transformations and Public Finances," Cambridge Books, Cambridge University Press, number 9780521192330, October.
  11. Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-40, May.
  12. Timothy Besley & Robin Burgess, 2000. "The Political Economy of Government Responsiveness: Theory and Evidence from India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 28, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  13. Edward L. Glaeser & Giacomo A. M. Ponzetto, 2012. "Shrouded Costs of Government: The Political Economy of State and Local Public Pensions," NBER Chapters, in: Retirement Benefits for State and Local Employees: Designing Pension Plans for the Twenty-First Century National Bureau of Economic Research, Inc.
  14. Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc.
  15. Fan, C. Simon & Lin, Chen & Treisman, Daniel, 2009. "Political decentralization and corruption: Evidence from around the world," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 14-34, February.
  16. Michael Greenstone, 2003. "Did the Clean Air Act Cause the Remarkable Decline in Sulfur Dioxide Concentrations?," Working Papers 0407, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  17. List, John A. & Gallet, Craig A., 1999. "The environmental Kuznets curve: does one size fit all?," Ecological Economics, Elsevier, vol. 31(3), pages 409-423, December.
  18. 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.
  19. Gennaioli, Nicola & Voth, Hans-Joachim, 2011. "State Capacity and Military Conflict," CEPR Discussion Papers 8699, C.E.P.R. Discussion Papers.
  20. John A. List & Daniel M. Sturm, 2004. "How Elections Matter: Theory and Evidence from Environmental Policy," NBER Working Papers 10609, National Bureau of Economic Research, Inc.
  21. Michael Greenstone, 2002. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1175-1219, December.
  22. Janet Currie & Johannes F. Schmieder, 2009. "Fetal Exposures to Toxic Releases and Infant Health," American Economic Review, American Economic Association, vol. 99(2), pages 177-83, May.
  23. James M. Snyder & David Strömberg, 2010. "Press Coverage and Political Accountability," Journal of Political Economy, University of Chicago Press, vol. 118(2), pages 355-408, 04.
  24. Matthew Gentzkow, 2006. "Television and Voter Turnout," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 931-972.
  25. Fredriksson, Per G & Gaston, Noel, 2000. "Environmental Governance in Federal Systems: The Effects of Capital Competition and Lobby Groups," Economic Inquiry, Western Economic Association International, vol. 38(3), pages 501-14, July.
  26. Nicola Gennaioli & Ilia Rainer, 2007. "The modern impact of precolonial centralization in Africa," Journal of Economic Growth, Springer, vol. 12(3), pages 185-234, September.
  27. John Joseph Wallis, 2000. "American Government Finance in the Long Run: 1790 to 1990," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 61-82, Winter.
  28. Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 703-745.
  29. Matthew Gentzkow & Jesse M. Shapiro, 2010. "What Drives Media Slant? Evidence From U.S. Daily Newspapers," Econometrica, Econometric Society, vol. 78(1), pages 35-71, 01.
  30. Erwin Bulte & John A. List & Mark C. Strazicich, 2004. "Regulatory Federalism and the Distribution of Air Pollutant Emissions," Working Papers 04-16, Department of Economics, Appalachian State University.
  31. Seabright, Paul, 1994. "Accountability and Decentralization in Government: An Incomplete Contracts Model," CEPR Discussion Papers 889, C.E.P.R. Discussion Papers.
  32. Tommaso Nannicini & Andrea Stella & Guido Tabellini & Ugo Troiano, 2010. "Social Capital and Political Accountability," Working Papers 2010.58, Fondazione Eni Enrico Mattei.
  33. Besley, Timothy & Smart, Michael, 2007. "Fiscal restraints and voter welfare," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 755-773, April.
  34. Wayne B. Gray & Ronald J. Shadbegian, 2002. "‘Optimal’ Pollution Abatement – Whose Benefits Matter, and How Much?," NCEE Working Paper Series 200205, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2002.
  35. Christos Kotsogiannis & Robert Schwager, 2005. "On the Incentives to Experiment in Federations," Discussion Papers 0507, Exeter University, Department of Economics.
  36. Dincecco, Mark, 2009. "Fiscal Centralization, Limited Government, and Public Revenues in Europe, 1650–1913," The Journal of Economic History, Cambridge University Press, vol. 69(01), pages 48-103, March.
  37. Rhys Andrews & George A. Boyne, 2009. "Size, Structure and Administrative Overheads: An Empirical Analysis of English Local Authorities," Urban Studies, Urban Studies Journal Limited, vol. 46(4), pages 739-759, April.
  38. Bengt Holmström, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 169-182.
  39. Simon Luechinger, 2009. "Valuing Air Quality Using the Life Satisfaction Approach," Economic Journal, Royal Economic Society, vol. 119(536), pages 482-515, 03.
  40. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
  41. Joanis, Marcelin, 2014. "Shared accountability and partial decentralization in local public good provision," Journal of Development Economics, Elsevier, vol. 107(C), pages 28-37.
  42. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part II: Multiple Policy Tasks," Levine's Working Paper Archive 321307000000000875, David K. Levine.
  43. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  44. Galiani, Sebastian & Gertler, Paul & Schargrodsky, Ernesto, 2008. "School decentralization: Helping the good get better, but leaving the poor behind," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2106-2120, October.
  45. Michael Greenstone & John A. List & Chad Syverson, 2011. "The Effects of Environmental Regulation on the Competiveness of U.S. Manufacturing," Working Papers 11-03, Center for Economic Studies, U.S. Census Bureau.
  46. Bård Harstad, 2007. "Harmonization and Side Payments in Political Cooperation," American Economic Review, American Economic Association, vol. 97(3), pages 871-889, June.
  47. Matthew E. Kahn, 1996. "New Evidence on Trends in Vehicle Emissions," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 183-196, Spring.
  48. Randy A. Becker & J. Vernon Henderson, 2001. "Costs of Air Quality Regulation," NBER Chapters, in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186 National Bureau of Economic Research, Inc.
  49. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
  50. John A. List & Shelby Gerking, 2000. "Regulatory Federalism and Environmental Protection in the United States," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 453-471.
  51. Miriam A. Golden & Lucio Picci, 2005. "Proposal For A New Measure Of Corruption, Illustrated With Italian Data," Economics and Politics, Wiley Blackwell, vol. 17, pages 37-75, 03.
  52. Kenneth Y. Chay & Michael Greenstone, 2003. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 1121-1167.
  53. Pamela Campa, 2015. "Press and Leaks: Do Newspapers Reduce Toxic Emissions?," Working Papers 2015-10, Department of Economics, University of Calgary, revised 01 Jul 2015.
  54. Ben Lockwood, 2002. "Distributive Politics and the Costs of Centralization," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 313-337.
  55. Dincecco, Mark & Katz, Gabriel, 2012. "State Capacity and Long-Run Performance," MPRA Paper 38299, University Library of Munich, Germany.
  56. John J. Wallis & Price V. Fishback & Shawn E. Kantor, 2006. "Politics, Relief, and Reform. Roosevelt's Efforts to Control Corruption and Political Manipulation during the New Deal," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 343-372 National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ieb:wpaper:2012/5/doc2012-14. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.