Trade in trash: A political economy approach

James Cassing and Ngo Long

European Journal of Political Economy, 2021, vol. 67, issue C

Abstract: We study how the opportunity to trade in trash might influence the equilibrium outcome when the tax on the externality is determined by a political economy process. In our model, individuals have heterogeneous preferences for environmental quality, and there is a wastage of real resources when funds are transferred from the pressure groups to the politicians. When hard-core environmentalists and capitalists are organized interest groups while moderate environmentalists are not organized, we find that the politically chosen tax on the externality is below the optimal Pigouvian level. The opportunity to export waste in unlimited quantities, but at a price, is not the environmentalists’ panacea and does not eliminate political social tension and suboptimal results.

Keywords: Trade in trash; Interest groups; Externalities; Environmental lobby; Political economy; Trade and environment (search for similar items in EconPapers)
JEL-codes: D72 F18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0176268020301300
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Trade in Trash: A Political Economy Approach (2020)
Working Paper: Trade in Trash: A Political Economy Approach (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:67:y:2021:i:c:s0176268020301300

DOI: 10.1016/j.ejpoleco.2020.101982

Access Statistics for this article

European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung

More articles in European Journal of Political Economy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().