Political Institutions, Environmental Policy and Growth

Renström, Thomas I and Laura Marsiliani

No 4670, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyse the impact of micro-founded political institutions on environmental policy and economic growth. We model an overlapping-generations economy, where individuals differ in preferences over the environment (as well as in age). Labour taxation and capital taxation is used to finance a public good and a public production factor, period by period. The underlying political institution is a parliament. Party entry, parliamentary composition, coalition formation, and bargaining are endogenous. The benchmark is when all decisions are taken in parliament. We compare this constitution with an independent regulator, elected in parliament. The regulatory regime causes lower pollution, but production inefficiency.

Keywords: Comparative politics; Voting; Bargaining; Taxation; Environmental policy; Endogenous growth; Overlapping generations (search for similar items in EconPapers)
JEL-codes: D62 D72 E20 E62 H20 H55 O41 Q58 (search for similar items in EconPapers)
Date: 2004-10
New Economics Papers: this item is included in nep-env, nep-mac, nep-pbe, nep-pol and nep-res
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Citations: View citations in EconPapers (2)

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