Transition to Markets and the Environment: Effects of the Change in the Composition of Manufacturing Output

Tomislav Vukina, John C. Beghin and Ebru G. Solakoglu

No 18327, Hebrew University of Jerusalem Archive from Hebrew University of Jerusalem

Abstract: The paper measures the changes in environmental quality that occurred in the early years of economic transition for 12 former centrally planned economies using information on 13 pollution effluents in the manufacturing sector and the energy intensity of the value added. For the manufacturing sector, the change in the pollution is separated into scale and composition effects. Pollution decreases substantially in most countries because of large decreases in aggregate manufacturing activity. The composition effect is more diverse depending on the effluent type and country. We examine the reduced form relationship between composition effects coupled with the energy intensity rate of change and the extent of policy reforms. The results indicate a strong relationship between environmental improvement and price liberalization, trade and foreign exchange reforms, enterprise restructuring, and privatization reforms. In addition, the amplification of the environmental regulatory regime causes a shift towards a less-polluting allocation of resources.

Keywords: Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 26
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ags:hebarc:18327

DOI: 10.22004/ag.econ.18327

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