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Partial environmental tax coordination and political delegation

Hikaru Ogawa

Journal of Environmental Economics and Management, 2021, vol. 110, issue C

Abstract: In the framework of environmental tax competition, this study analyzes the political delegation of tax decisions in oil-producing and oil-importing countries. The main findings are as follows: (i) with uncoordinated tax competition, voters in oil-producing countries typically choose a policymaker who is less green than the median to drive oil prices in their favor, while voters in the oil-importing countries prefer green policymakers over the median; (ii) when oil-producing countries form an oil cartel to coordinate their policies, in anticipation of such coordination, voters elect green policymakers over the median not only in oil-importing countries but also in oil-producing countries; and (iii) policy coordination by oil-producing countries is more likely to be sustained when policy leaders in those countries are exogenous to citizens for reasons such as royal rule, but it is more likely suffer a breakdown when policy leaders are elected.

Keywords: Environmental tax competition; Political delegation; Partial tax coordination (search for similar items in EconPapers)
JEL-codes: H2 H7 Q3 Q5 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jeem.2021.102565

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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