Environmental Federalism and Atmospheric Pollution: Efficacy of Local vs State Expenditure

Shyam Nath () and Yeti Nisha Madhoo
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Shyam Nath: Amrita Vishwa Vidyapeetham University
Yeti Nisha Madhoo: Amrita Vishwa Vidyapeetham University

Chapter Chapter 9 in Vanishing Borders of Urban Local Finance, 2022, pp 263-296 from Springer

Abstract: Abstract This chapter empirically tests the suitability of local vs state government expenditure in providing an environmental public good, namely airborne pollution control in two municipal areas in India. We employ an innovative methodology where factual and counterfactual state and local expenditure regimes are constructed to capture different degrees of decentralization. Econometric results highlight higher efficacy of state-level expenditure (centralization) as spillover/regional effects become important. Particularly, superiority of state expenditure is evident in the control of suspended particulate matter (SPM), which has wide cross-boundary effects. Local expenditure and the counterfactual of local expenditure for uniform provision (both decentralized provision modes) emerge as more effective than state to control point-source local pollutant sulphur dioxide (SO2). However, they may also supplement the effects generated by state expenditure in the case of nitrogen dioxide (NO2) emissions, which entail spillovers and seem amenable to pressure group influence at local level.

Keywords: Environmental governance; Fiscal decentralization; Atmospheric pollution; Spillover effects; Non-point-source pollution (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-19-5300-2_9

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DOI: 10.1007/978-981-19-5300-2_9

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