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Environmental federalism : a panacea or Pandora's box for developing countries?

Author

Listed:
  • Fredriksson, Per G.
  • Mani, Muthukumara
  • Wollscheid, Jim R.

Abstract

This paper provides new empirical evidence to the debate on the optimal locus of power over environmental policymaking in developing countries. The authors develop a simple lobby group model with mobile capital. The model predicts that a decentralized institutional structure leads to weaker environmental policy due to more intensive lobbying by capital owners and workers. They test this prediction using novel cross-sectional developing country data. The results are consistent with the prediction of the model, in particular for air pollution policies. The authors also find that the effect of decentralization declines with a greater degree of trade openness. They believe this is the first developing country evidence on the environmental policy effects of federalism.

Suggested Citation

  • Fredriksson, Per G. & Mani, Muthukumara & Wollscheid, Jim R., 2006. "Environmental federalism : a panacea or Pandora's box for developing countries?," Policy Research Working Paper Series 3847, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3847
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    References listed on IDEAS

    as
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    Cited by:

    1. Ida Ferrara & Paul Missios & Halis Murat Yildiz, 2014. "Interregional competition, comparative advantage and environmental federalism," Canadian Journal of Economics, Canadian Economics Association, vol. 47(3), pages 905-952, August.
    2. Fünfgelt, Joachim & Schulze, Günther G., 2016. "Endogenous environmental policy for small open economies with transboundary pollution," Economic Modelling, Elsevier, vol. 57(C), pages 294-310.
    3. Owen, Ann L. & Videras, Julio, 2008. "Trust, cooperation, and implementation of sustainability programs: The case of Local Agenda 21," Ecological Economics, Elsevier, vol. 68(1-2), pages 259-272, December.

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    Keywords

    Environmental Economics&Policies; Economic Theory&Research; Banks&Banking Reform; Environmental Governance; Green Issues;

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