IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/7605.html
   My bibliography  Save this paper

Determining Environmental Quality in a Federal Setting: An Empirical Analysis of Subnational Governments in India

Author

Listed:
  • Chakraborty, Lekha S

Abstract

Against the analytical backdrop of environmental federalism, the paper examines the impact of fiscally decentralized public policy stance on environmental quality in India. Unlike many studies which analysed the fiscally decentralized determination of environmental welfare from tax-side through modeling interjurisdictional competition and ‘race to bottom’, this paper attempts to look at the link from public expenditure side in a Kuznets’ U specification. The paper does not refute the widely explored Kuznets U phenomenon between economic growth and the environmental quality, rather it emphasizes that it does substantially through conscious public policies on reforestation and pollution abatement with adequate public expenditure decisions. Using GSLS and fixed effects model of pooled least squares for the late 1990s, the analysis of the link between decentralized environmental expenditure in per capita terms and the environmental quality indicators for the forestry sector revealed that there is a positive functional relationship between the variables. The models also revealed the effectiveness of economic growth variables in creating the Kuznet’s U effect on environmental quality. However, the panel estimates showed that fiscal policy has a stronger impact on environmental quality than the Kuznets U-impact of economic growth. This result is in confirmation with the trend that fiscal policies on environmental capital formation gets transformed to the end results of better environmental quality indicators, despite the constraints of initial negative impacts of economic growth on ecology.

Suggested Citation

  • Chakraborty, Lekha S, 2006. "Determining Environmental Quality in a Federal Setting: An Empirical Analysis of Subnational Governments in India," MPRA Paper 7605, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7605
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/7605/1/MPRA_paper_7605.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Suri, Vivek & Chapman, Duane, 1998. "Economic growth, trade and energy: implications for the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 25(2), pages 195-208, May.
    2. Mandal, Subrata & M. Govinda Rao, 2005. "Overlapping fiscal domains and effectiveness of environmental policy in India," Working Papers 05/25, National Institute of Public Finance and Policy.
    3. Daniel L. Millimet, 2003. "Assessing the Empirical Impact of Environmental Federalism," Journal of Regional Science, Wiley Blackwell, vol. 43(4), pages 711-733.
    4. Oates, Wallace, 2001. "A Reconsideration of Environmental Federalism," Discussion Papers dp-01-54, Resources For the Future.
    5. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    environmental federalism; fiscally decentralized public policy stance; Kuznets’ U specification;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:7605. 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: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.