Economic Growth, Inequality, Democratization, and the Environment

Clas Eriksson () and Joakim Persson
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Clas Eriksson: Department of Economics, Postal: Swedish University of Agricultural Sciences, P.O. Box 7013, SE-750 07 Uppsala, Sweden
Joakim Persson: Trade Union Institute for Economic Research, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden

No 178, Working Paper Series from Trade Union Institute for Economic Research

Abstract: We augment the Stokey (1998) model by allowing agents to differ with respect to environmental quality and income in order to analyze the impact of income and environmental inequality, and of democratization on aggregate pollution. We find that the impact of a more equal income distribution depends on the degree of democracy. In a complete democracy a more equal income distribution generates, ceteris paribus, less pollution, which is consistent with indirect empirical evidence, whereas the opposite is the case if democratic rights are highly restricted. Further-more, a democratization is argued to typically lower both the income and the environmental quality of the median voter. In this case, if, in utility terms, the fall in environmental quality is worse than the fall in consumption the median voter decides to tighten environmental legislation so that aggregate pollution decreases.

Keywords: Economic growth and the environment; inequality; politics (search for similar items in EconPapers)
JEL-codes: O41 Q20 Q30 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2002-08-16
New Economics Papers: this item is included in nep-mac
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Published in Environmental and Resource Economics, 2003, pages 1-16.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:fiefwp:0178

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