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Corruption, Inequality, and Environmental Regulation

  • Jie He

    ()

    (GREDI, Département d'économique, Université de Sherbrooke)

  • Paul MAKDISSI

    ()

    (Departement d’´economique and CEREF, Universite de Sherbrooke, 2550 boulevard de l’Universite, Sherbrooke, Québec, Canada, J1K 2R1)

  • Quentin WODON

    ()

    (LCSPR, World Bank, 1818 H Street, NW, Washington, DC 20433, USA)

We develop two public choice models in which environmental regulation is determined endogenously in the presence of agents who are heterogenous in wealth or income. In the first model, regulation is determined by a majority vote, and an increase in inequality induces an increase in environmental standard. In the second model, the environmental standard is chosen by a corrupt bureaucrat. In that model, while the impact of an increase in inequality on the environmental standard is uncertain, a higher level of corruption always reduces the quality of environmental regulation. An empirical analysis using cross-country data confirms the implication of both models.

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File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0713.pdf
File Function: First version, 2007
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Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 07-13.

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Length: 40 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:shr:wpaper:07-13
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Phone: (819) 821-7233
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