Environmental Policy in a Federation with Special Interest Politics and Inter-governmental Grants
Published By: Centre for International Trade and Development - J | Published Date: February, 01 , 2015The paper explores the potential effect of intergovernmental grants (IGG) on sub-national (local) environmental policy in a federal structure. In the model, a politically-inclined local government receives campaign contributions from the polluters’ lobby in return for lower pollution taxes. Environmental policies in two jurisdictions may become strategic complements or substitutes depending on their relative pollution levels. The possibility of strategic substitution implies that federal welfare may not increase even when environmental policy becomes stricter in one state.
Author(s): Divya Datt, Meeta Keswani Mehra | Posted on: Mar 15, 2016 | Views() | Download (187)