Should Large Developing Countries Pursue Environmental Policy Unilaterally?

Amitrajeet Batabyal

Indian Economic Review, 1993, vol. 28, issue 2, 191-202

Abstract: In this paper, we ask the following question. Why is it that despite the universal recognition of the need for global environmental protection, developing countries have been lax in instituting stringent environmental regulations? Addressing this question from an economic perspective, we study two general cases. In the first case, production in the export sector of large developing country, and in the second case, production in the import sector of the same country cause pollution. We show that there are plausible theoretical circumstances in which a large developing country can be worse off if it chooses to implement environmental policy on its own. The empirical dimension of this result is stressed and the key parameters- such as elasticities and marginal propensities to consume- which are germane to any policy discussion regarding this issue are identified. We conclude by discussing the implications of our results for (a) the specific issue of the courses of action available to large developing countries and (b) the more general question of global environmental protection.

JEL-codes: D62 F42 (search for similar items in EconPapers)
Date: 1993
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