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Ecological Fiscal Incentives and Spatial Strategic Interactions: the Case of the ICMS-E in the Brazilian state of Paraná

Sébastien Marchand (), Alexandre Sauquet and José Féres

No 201219, Working Papers from CERDI

Abstract: The ICMS-Ecológico is a fiscal transfer mechanism from states to municipalities, implemented in the early 1990's in Brazil, to reward municipalities for the creation and management of protected areas. This paper investigates the efficiency of this mechanism by testing for the presence of interactions among Brazilian municipalities in their decision to create conservation units, in the state of Paraná, between 2000 and 2010. We estimate a Bayesian spatial Tobit model in order to analyze the behavior of municipalities. The empirical investigation reveals strategic substitutability in municipalities conservation decisions.

Keywords: Land use; Biodiversity; Fiscal Federalism; Interactions; Spatial Tobit model; Brazil (search for similar items in EconPapers)
JEL-codes: Q57 O13 H23 (search for similar items in EconPapers)
Pages: 35
Date: 2012
New Economics Papers: this item is included in nep-env and nep-ure
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