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How Elections Matter: Theory and Evidence from Environmental Policy

  • John A. List
  • Daniel M. Sturm

In this paper we explore to what extent secondary policy issues are influenced by electoral incentives. We develop a political agency model in which a politician decides on both a frontline policy issue, such as the level of public spending, and a secondary policy issue, such as environmental policy. The model shows under which conditions the incumbent finds it worthwhile to manipulate the secondary policy to attract additional votes to his platform. We test the predictions of the model using state-level panel data on Gubernatorial environmental policy choices over the years 1960-2000. In contrast to the popular view that choices on secondary policy instruments are largely determined by lobbying, we find strong effects of electoral incentives on environmental policy.

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File URL: http://www.nber.org/papers/w10609.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10609.

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Date of creation: Jul 2004
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Publication status: published as John A List & Daniel M Sturm, 2006. "How Elections Matter: Theory and Evidence from Environmental Policy," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1249-1281, November.
Handle: RePEc:nbr:nberwo:10609
Note: PE EEE
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  1. Tim Besley, 2002. "Political institutions and policy choices: evidence from the United States," IFS Working Papers W02/13, Institute for Fiscal Studies.
  2. McAusland, Carol, 2003. "Voting for pollution policy: the importance of income inequality and openness to trade," Journal of International Economics, Elsevier, vol. 61(2), pages 425-451, December.
  3. Lahiri, Sajal & Raimondos-Moller, Pascalis, 2000. "Lobbying by Ethnic Groups and Aid Allocation," Economic Journal, Royal Economic Society, vol. 110(462), pages C62-79, March.
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  5. Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December.
  6. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
  7. Banks, Jeffrey S. & Sundaram, Rangarajan K., 1998. "Optimal Retention in Agency Problems," Journal of Economic Theory, Elsevier, vol. 82(2), pages 293-323, October.
  8. Besley, Timothy J. & Burgess, Robin, 2001. "The Political Economy of Government Responsiveness: Theory and Evidence from India," CEPR Discussion Papers 2721, C.E.P.R. Discussion Papers.
  9. Grossman, Gene M. & Helpman, Elhanan, 1995. "Trade Wars and Trade Talks," Scholarly Articles 3450062, Harvard University Department of Economics.
  10. Pinelopi Koujianou Goldbe & Giovanni Maggi, 1997. "Protection for Sale: An Empirical Investigation," NBER Working Papers 5942, National Bureau of Economic Research, Inc.
  11. Nicolas Marceau & Michael Smart, 2003. "Corporate Lobbying and Commitment Failure in Capital Taxation," American Economic Review, American Economic Association, vol. 93(1), pages 241-251, March.
  12. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  13. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 265-86, April.
  14. Besley, Timothy & Case, Anne, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 769-98, August.
  15. Congleton, Roger D, 1992. "Political Institutions and Pollution Control," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 412-21, August.
  16. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-85, December.
  17. Coate, Stephen & Morris, Stephen, 1995. "On the Form of Transfers in Special Interests," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1210-35, December.
  18. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
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