Trade Integration and Political Turbulence: Environmental Policy Consequences

Per G. Fredriksson and Muthukumara Mani
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Per G. Fredriksson: Southern Methodist University
Muthukumara Mani: The World Bank

The B.E. Journal of Economic Analysis & Policy, 2004, vol. advances.4, issue 2

Abstract: This paper contributes to the unresolved issue regarding the effect of economic integration on environmental policymaking. In particular, we discuss the joint impact of trade openness and political stability on environmental policymaking. Our theory predicts that the effect of trade integration on environmental policy is conditional on the degree of political stability. Trade integration affects the stringency of environmental policies due to changes in industry bribery behavior, and the effect is conditional on the degree of political stability. The empirical findings support the theory and are robust to alternative specifications. The stringency enhancing effect on environmental policy of trade integration is greater in politically stable countries.

Keywords: Trade liberalization; environmental regulations; political instability; pollution haven; trade policy (search for similar items in EconPapers)
JEL-codes: Q28 F13 D72 D78 (search for similar items in EconPapers)
Date: 2004
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Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejeap:v:advances.4:y:2004:i:2:n:1

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