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Public Opinion, Elections, and Environmental Fiscal Policy

Georgios Chortareas, Vassilis Logothetis () and Andreas Papandreou ()
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Andreas Papandreou: National and Kapodistrian University of Athens

No E2018/9, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: We investigate how public opinion along with the electoral process affect the strength of environmental fiscal policies in the European Union (EU). Our analysis accounts for a set of economic, institutional, and political factors that can affect environmental taxes and expenditures. We pursue a dynamic panel data analysis covering 27 EU countries using public opinion data. We produce evidence showing that public concern for the environment, as gauged by opinion surveys, positively affects environmental protection expenditures, while elections negatively affect environmental tax revenues and environmental protection expenditures shrink in the aftermath of elections. We do not find evidence of partisan effects. The effect of public opinion and elections on environment-related fiscal decisions depends on the degree of integration with the global economy as well as several institutional factors including the level of corruption and the soundness of the rule of law. We also document that the results are impervious to a wide set of robustness tests.

Keywords: Environmental Protection; Taxes and Expenditures; Public Opinion; European Union; Panel Data (search for similar items in EconPapers)
JEL-codes: D72 Q58 C23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-eec, nep-env, nep-pol and nep-res
Date: 2018-04
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