Corruption, Inequality, and Environmental Regulation

Jie He (), Paul Makdissi () and Quentin Wodon ()

Cahiers de recherche from Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke

Abstract: 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.

Keywords: Environmental regulation; corruption; inequality (search for similar items in EconPapers)
JEL-codes: Q56 Q58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env, nep-pol and nep-reg
Date: 2007
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Persistent link: http://EconPapers.repec.org/RePEc:shr:wpaper:07-13

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