The Ecological Impact of Place‐Based Economic Policies

Teevrat Garg and Ajay Shenoy

American Journal of Agricultural Economics, 2021, vol. 103, issue 4, 1239-1250

Abstract: Does economic development have an unavoidable ecological cost? We examine the impacts on forest cover of one of India's signature place‐based economic policies involving massive tax benefits for new industrial and infrastructure development following the creation of the new state of Uttarakhand. Using a spatial difference‐in‐discontinuities design, we show that the policy, which explicitly excluded environmentally damaging industries, resulted in no meaningful change in local forest cover. Our results suggest that even in settings with low levels of enforcement, place‐based economic policies that deliver transformative economic expansion can be implemented with minimal ecological costs.

Date: 2021
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https://doi.org/10.1111/ajae.12193

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Working Paper: The Ecological Impact of Place-Based Economic Policies (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:ajagec:v:103:y:2021:i:4:p:1239-1250

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