energy market liberalization and renewable energy policies in oecd countries abstract this paper investigates the effect of energy liberalization compared to other drivers on policies that support renewable energy in a long panel of oecd countries we estimate this effect by accounting for the endogeneity of liberalization related to joint decisions within a country s energy strategy using regulation in other industries as instruments we find that energy liberalization increases public support for renewable energy the effect of liberalization is the second largest after the effect of per capita income and is mostly driven by reductions in entry barriers while the effect of privatization is unclear this finding suggests that a reduction in the monopolistic power of state owned utilities has a positive effect on renewable energy policies when various types of actors are ensured access to the grid instead of it being provided to only a few large private firms

political instability corruption and policy formation the case of environmental policy abstract this paper develops a theory of environmental policy formation taking into consideration the degree of corruptibility and political turbulence the predictions that emerge are that the interaction between the two variables is important political instability has a negative effect on the stringency of environmental regulations if the level of corruption is low but a positive effect when the degree of corruption is high corruption reduces the stringency of environmental regulations but the effect disappears as political instability increases the empirical findings are fully consistent with the predictions of the model

does democracy lead to a better environment deforestation and the democratic transition peak the relationship between democracy and environment is subject to controversy some scientists find that democracy has a positive impact in reducing environmental disruption other scholars claim that democracy tends to accelerate environmental degradation by using deforestation rates as a proxy for environmental disruption we suggest that both sides might be right our quantitative analysis has three important outcomes first there is evidence of an inverted u shaped relationship between deforestation and democracy second countries in democratic transition experience the highest deforestation rates compared to non democracies and mature democracies third in explaining deforestation rates democracy has larger explanatory power than income this last result implies that in reducing deforestation rates the emphasis should not only be on economic development but even more on democratization

common agency and coordination general theory and application to government policy making we develop a model of common agency with complete information and general preferences with nontransferable utility and we prove that the principals nash equilibrium in truthful strategies implements an efficient action we apply this theory to the construction of a positive model of public finance where organized special interests can lobby the government for consumer and producer taxes or subsidies and targeted lump sum taxes or transfers the lobbies use only the nondistorting transfers in their noncooperative equilibrium but their intergroup competition for transfers turns into a prisoners dilemma in which the government captures all the gain that is potentially available to the parties

legislative organization and pollution taxation the role of political institutions in shaping public policy has been analyzed in isolation from corruption and legislative organization specifically bicameralism has received minimal attention we analyze pollution taxation when decisions are influenced by several veto players such as legislative chambers our theory predicts that an increase in the number of veto players e g moving from uni to bi cameralism pushes the pollution tax towards the social optimum with the effect being conditional on corruption as such dispersion around the optimal tax is lower under bicameralism empirical tests using data from 86 countries support the theory

corruption and infrastructure at the country and regional level abstractthis paper examines the relationship between corruption and infrastructure at both the country and regional level using the world bank s enterprise surveys data a statistically significant and considerable relationship is established between the measure of corruption in the macro data and the measures of transportation and electricity infrastructure countries with more corruption tend to have worse infrastructure at the regional level the key result is unchanged the magnitude and significance of this result is shown to vary by global region two stage least squares results using distance from the equator as an instrument at the macro level support the simple ordinary least squares ols finally it is shown that within country variation in corruption has a significant effect on regional infrastructure

political internalization of economic externalities and environmental policy abstract this paper derives the characteristics of endogenous environmental policy in a common agency model of politics and proceeds to show that competition between lobby groups is an important source of internalization of economic externalities our analysis generalizes bhagwati s principle of targeting to the case of distorted political markets moreover we show that the politically optimal structure of environmental taxes incorporates a pigouvian adjustment however since lobby groups care about the distribution of income as well as about efficiency the equilibrium structure of taxes differs considerably from the pigouvian rule

income distribution political instability and investment abstract this paper successfully tests on a sample of 71 countries for the period 1960 85 the following hypotheses income inequality by fuelling social discontent increases sociopolitical instability the latter by creating uncertainty in the politico economic environment reduces investment as a consequence income inequality and investment are inversely related since investment is a primary engine of growth this paper identifies a channel for an inverse relationship between income inequality and growth we measure socio political instability with indices which capture the occurrence of more or less violent phenomena of political unrest and we test our hypotheses by estimating a two equation model in which the endogenous variables are investment and an index of socio political instability our results are robust to sensitivity analysis on the specification of the model and the measure of political instability and are unchanged when the model is estimated using robust regression techniques

environmental depletion governance and conflict t he link between natural resource dependence and internal conflict has been approached from a variety of angles in a large and growing interdisciplinary literature while there is an expanding consensus as to what matters the most for such intra state violence episodes the feasibility discontent dichotomy still appears to characterize a disciplinary divide between economists and political scientists this paper attempts to help bridge the gap by allowing for both intrinsic and extrinsic motivations of potential rebels simple non cooperative bargaining yields a nonlinear impact of regulatory quality on the likelihood of conflict and shows that corruption and resource depletion jointly affect the outcome the empirical analysis that follows looks at the effect of environmental depletion and government corruption on the emergence of civil conflicts using a large panel dataset resource depletion the quality of governance and their interaction are found to be significant determinants of civil conflict incidence results are robust to several steps taken to address potential endogeneity concerns

the voluntary provision of a pure public good the case of reduced cfc emissions and the montreal protocol abstract this paper applies the theory of the voluntary provision of a pure public good to the behavior of nations to curb chlorofluorocarbon cfc emissions during the late 1980s by devising an empirical test we determine that these cutbacks in emissions are consistent with nash behavior when taste parameters are controlled the relationship between emission cutbacks and national income is nearly linear as implied by the theory if the sample is purged of potential outliers then the linear relationship results a significant taste parameter is the extent of political and civil freedoms while a marginally significant parameter is geophysical position in terms of latitude

is income inequality a driver for renewable energy consumption abstract although many initiatives have been made to research the effect of income inequality on environmental issues the question of whether income inequality affects renewable energy consumption hasn t been answered this gap in the literature raises an important question that needs to be answered by researchers can the income inequality affect renewable energy consumption as far as is known the study is the first attempt to discover this relationship therefore the impact of income inequality on renewable energy consumption is examined theoretically and empirically in 43 developed and developing countries for 2000 2015 in order to avoid the omitted variable problem economic environmental and institutional variables such as gdp per capita corruption co2 emissions and trade openness are included in the model the results demonstrate that the decline in income inequality will enhance renewable energy consumption in other words policymakers have the opportunity to reduce income inequality and environmental degradation at the same time similarly corruption control and raise co2 emissions will increase also renewable energy consumption otherwise economic determinants such as economic growth and trade openness have no meaningful effect on renewable energy consumption

green havens and pollution havens we test for pollution haven effects in outward foreign direct investment fdi for different sectors using a comprehensive and exhaustive data set for outward fdi from the netherlands one of the most environmentally stringent countries and a major source of global fdi our evidence suggests that in the sectors natural resources extraction and refining construction retail food processing beverages and tobacco and utilities a less stringent environmental policy in the host country significantly attract fdi what is important for these pollution haven effects is not only regulation but also enforcement of environmental policy in contrast to earlier results it is not only footloose industries that display pollution haven effects but also the traditional pollution intensive industries but for the machines electronics and automotive and transportation and communication sectors a more stringent and better enforced environmental policy attracts more fdi as this may help their reputation for sustainable management and csr these sectors display green haven effects these findings have important implications for the sector distribution of fdi in destination countries

environmental performance in socially fragmented countries social fragmentation is often associated with reduced co operative behaviour which undermines public goods provision such as environmental protection the few studies linking social fragmentation and environmental performance have been confined to using ethnic fractionalisation as the only measure of social heterogeneity in this paper we contribute to the literature in a twofold manner first we bring into the analysis alternative measures of social fragmentation i e religious fractionalisation ethnic religious polarisation that have received considerable attention in development economics in recent years second this is the first study to our knowledge that makes use of a large panel dataset of several environmental indicators to explore links between ethnic religious diversity and the environment we find that all indices of social fragmentation are negatively linked to measures of environmental quality although for some of them the size of the effect is larger in the case of polarisation

an empirical investigation of the pollution haven effect with strategic environment and trade policy abstract using a new dataset on the stringency and enforcement of environmental policy this study is the first to find robust confirmation of a pollution haven effect in a cross country context by accounting for strategically determined environment trade and intellectual property right ipr policies a simple game theoretic approach to policy determination is described which suggests an identification strategy based on other country characteristics it is found that for the top 20th percentile of countries in terms of growth in u s multinational affiliate value added as much as 8 6 of that growth between 1999 and 2003 can be attributed to declining relative stringency and enforcement of environmental policy the results are robust to a number of identification tests weak iv tests and third country spatial effects further evidence is found that relatively footloose industries are more likely to be affected by environmental policy than more traditionally dirty industries and enforcement of environmental policies tends to be a more important deterrent than the stringency of the policy set

uncovering the complex relationships between political risk and mne firm legitimacy insights from libya using the before after natural experiment occasioned by the arab spring in libya we explore how market and non market activity affect foreign firm legitimacy in times of political turmoil although all mnes in libya had to cultivate strong ties to qadhafi to succeed during his 40 years of rule we found that those that also invested in social benefit projects and in social ties with families with few ties to the qadhafi family earned a broad based legitimacy that helped them survive qadhafi s overthrow our findings contribute to the political risk and political behavior literature the notion that the pursuit of firm legitimacy in general and especially in the eyes of social sector actors is an effective hedge against political risk more theoretically our findings support the addition of a social sector based path to firm legitimacy in the host country that complements and may at times substitute for the government based path to foreign firm legitimacy practically our findings suggest that mnes facing severe political risk can improve their prospects for survival by investing in relationships with influential social groups and by offering goods or services that are perceived as socially valuable

lobbying and welfare in a representative democracy this paper studies the impact of lobbying on political competition and policy outcomes in a framework which integrates the citizen candidate model of representative democracy with the menu auction model of lobbying positive and normative issues are analysed on the positive side lobbying need have little or no effect on policy outcomes because voters can restrict the influence of lobbyists by supporting candidates with offsetting policy preferences on the normative side coordination failure among lobbyists can result in pareto inefficient policy choices in addition by creating rents to holding office lobbying can lead to excessive entry into electoral competition

does foreign aid distort incentives and hurt growth theory and evidence from 75 aid recipient countries foreign aid transfers can distort individual incentives and hence hurt growth by encouraging rent seeking as opposed to productive activities we construct a model of a growing small open economy that distinguishes two effects from foreign transfers i a direct positive effect as higher transfers allow the financing of infrastructure ii an indirect negative effect as higher transfers induce rent seeking competition by self interested individuals in this framework the growth impact of aid is examined jointly with the determination of rent seeking behavior we test the main predictions of the model for a cross section of 75 aid recipient countries there is evidence that aid has a direct positive effect on growth which is however significantly mitigated by the adverse indirect effects of associated rent seeking activities this is especially the case in recipient countries with relatively large public sectors

seigniorage and political instability the importance of seigniorage relative to other sources of government revenue differs markedly across countries this paper tries to explain this regularity by studying a political model of tax reform the model implies that countries with a more unstable and polarized political system will have more inefficient tax structures and thus will rely more heavily on seigniorage this prediction of the model is tested on cross sectional data for seventy countries the authors find that after controlling for other variables political instability is positively associated with seigniorage copyright 1992 by american economic association

firm size government capacity and regional environmental regulation theoretical analysis and empirical evidence from china abstract the size and number of firms in a region represent key characteristics of that regional economic ecosystem but few studies have linked such characteristics with the stringency of local environmental regulation in this study we discuss the effects of local firm scale on environmental regulation and its mechanism and the optimal strategic choices theoretically and empirically for environmental regulation in regions with different firm scale we find that when government capacity is insufficient regional environmental regulation will be relatively more stringent when dealing with fewer but larger firms because of the government scale effect when government capacity is sufficient firm size has no influence on environmental regulation our results are robust and offer insights for government decision makers to improve local environmental regulation efficiency

the productivity of foreign resource inflow to the soviet economy the recent growth in soviet borrowing from the west resulting in the rise of net soviet debt to 16 billion by 1977 has raised the analytical question of considerable economic and political significance how much are such credits worth to the soviet union several alternative approaches to answering this question are possible broadly speaking they may be grouped into two categories partial equilibrium and general equilibrium in the partial equilibrium analyses we may include i the econometric investigation of whether foreign capital goods have greater productivity in soviet industry and branches than domestic capital goods the relevance of this to the problem at hand being established by the argument that foreign credits may be jointly supplied with the capital goods embodying advanced technology and ii the noneconometric examinations of the role that foreign credits and technology can or do play in specific sectors for example automobiles and oil on the other hand a partial equilibrium approach is not a satisfactory way to approach the question at hand the productivity of foreign credits can be defined meaningfully only in the context of the use of resources generally requiring a general equilibrium approach in turn a general equilibrium approach may be based on the incorporation of foreign credits into one of the large models either of the computable planning type or of the econometric variety as represented by the sovmod exercise of donald green and christopher higgins the productivity of foreign credits being estimated by the required variation in the levels of foreign borrowing therein however these large models tend to be rather cumbersome and the total effects of parametric variations are therefore extremely difficult to disentangle small models by contrast often have the advantage of both elegance and ease of interpretation while not burying the essence of the economic system within a complex structure in this paper i have chosen the small simple decision model approach and elaborated a general equilibrium model of the solow swan variety using a ces production function i have estimated the functional relationships postulated and calculated the productivity of foreign resource inflow of which foreign credits are a component within it in section i the model is set out its structure is justified and the analytical methods to be used to calculate the productivity of foreign resource inflow in it are spelled out in section ii i present the estimates of the model and the productivity of foreign resource inflow that emerges from them section iii offers some concluding observations in light of the estimates

optimal tariffs on exhaustible resources we characterize the markov perfect equilibria of two games in which oligopsonistic importers of an exhaustible resource confront competitive suppliers who have rational expectations the games differ only in the timing of moves or the speed with which participants can adjust their plans the optimal tariff when sellers move first are less flexible differs considerably from that in which buyers move first and sellers retain more control over intertemporal arbitrage opportunities if the initial stock is small buyers suffer a disadvantage from being the first mover this is reversed if the stock is large

environmental performance corruption and economic growth global evidence using a new data set abstractthis study investigates the relationship between environmental performance corruption and economic growth using panel data of 87 countries covering the period from 2002 to 2012 the environmental performance index is used for the first time to evaluate the environmental quality on economic growth by employing both static and dynamic panel models we find that environmental performance is positively related to economic growth and is more significant in non organization for economic cooperation development oecd countries moreover when corruption is incorporated the empirical estimation results indicate that although lower corruption helps economic growth in non oecd countries the negative coefficients of the three interactive terms show that the positive effect of environment performance on economic growth will drop while greater environmental performance combined with natural resource abundance inevitably leads to inefficient bureaucracies and hence disadvantageous economic growth as

political institutions and pollution control this paper models the selection of environmental policies under authoritarian and democratic regimes and tests the hypothesis that political institutions systematically affect the enactment of environmental regulations the results support the contention that political institutional arrangements rather than resource endowments largely determine policies concerning environmental regulation copyright 1992 by mit press

why a stubborn conservative would run a deficit policy with time inconsistent preferences a conservative government in favor of a low level of public consumption knows that it will be replaced by a government in favor of a larger level of public consumption we show that the resulting level of public consumption is in between the levels the two governments would choose if each were in power both in the present and in the future in particular we show that if the conservative government is more stubborn in a particular sense than the succeeding government the conservative government will borrow more than it would had it remained in power in the future

statehood experience legal traditions and climate change policies this study investigates how the implementation of modern climate change policies is related to former colonies length of state history and their legal heritage we argue that countries with longer statehood experience around the time of colonization were better equipped to implement the legal philosophies transplanted by their colonial powers therefore the implications of receiving british common law versus french civil law should be particularly important in countries with a greater accumulated history of statehood using a cross section of up to 78 former colonies our results provide support for this hypothesis in particular our estimates demonstrate that common law countries have weaker modern climate change policies than civil law countries and the difference is inflated by a longer statehood experience measured by the length of state history from 1 to 1800 ad legal origin has no effect in areas which by the time of colonization had no statehood experience finally we report similar results for the pattern of labor market regulations jel k15 k31 k32 o44 q54 q58

ownership risk investment and the use of natural resources the effect of insecure ownership on ordinary investment and natural resource use is examined insecure ownership is postulated to depend on the type of government regime in power and the prevalence of political violence or instability the political determinants of economy wide investment are estimated from cross country data and the results are used to form an index of ownership security when introduced into empirical models of natural resource use this index has a significant and quantitatively important effect on the use of forests and petroleum contrary to conventional wisdom ownership risk slows resource use in some circumstances

environmental regulations transfers and trade theory and evidence abstract this paper develops a theory of compensation of producers for the costs associated with environmental regulations we show that the existence of transfers can give counter intuitive effects of environmental policy on both output and trade flows in particular the compensation obtained by producers neutralizes the effect of environmental policy on output and consequently on trade flows this may help explain why previous empirical research has found weak evidence that environmental regulations affect trade patterns the theory is tested using agricultural sector data the evidence supports the hypothesis that environmental regulations and transfers are positively correlated

corruption income and the environment an empirical analysis abstract in response to the recent growth of a largely theoretical body of literature analysing the linkages between corruption and pollution this paper subjects the corruption pollution relationship to a detailed empirical examination a distinction is drawn between the direct impact of corruption on pollution and the indirect impact which operates through corruption s impact on per capita income and the resultant impact of income on pollution using data for 94 countries covering the period 1987 2000 both direct and indirect impacts of corruption on air pollution emissions are estimated for both sulfur dioxide and carbon dioxide corruption is estimated to have a positive direct impact on per capita emissions indirect effects are found to be negative and larger in absolute value than direct effects for the majority of the sample income range as a result the total effect of corruption on emissions is negative for all but the highest income countries in the sample

corruption and growth under weak identification i introduction the purpose of this paper is to revisit mauro 1995 and re examine his results as a consequence of recent research that cautions against making traditional types of inference in the presence of weak instruments early work done by nelson and startz 1990a 1990b demonstrates that the distribution of the two stage least squares 2sls estimator and the t statistic is poorly approximated by the asymptotic representation when instruments are weak more formally staiger and stock 1997 model the coefficients on the instruments in the first stage equation in the n sup 1 2 neighborhood of zero in which they show that the 2sls estimator loses consistency resulting in a nonstandard distribution for the t statistic in fact they show that under the local to zero framework the distribution of the t statistic depends on the level of endogeneity strength and the number of instruments thus the true size of the t statistic can differ substantially from its perceived size when instruments are weak therefore 95 confidence intervals based on asymptotic approximations such as or 1 96se are no longer reliable as a rough rule of thumb staiger and stock 1997 suggest a first stage f stat of 10 on the excluded instruments as an indication of acceptable instruments in terms of point estimation bound jaeger and baker 1995 show that the 2sls estimator is biased in the same direction as the ordinary least squares ols when using irrelevant instruments hahn and hausman 2002 illustrate a detailed expression for the 2sls bias showing that it is monotonically decreasing in the instrument strength while monotonically increasing in the degree of endogeneity cruz and moreira 2005 verify these results through monte carlo simulations also showing that the classic bias corrected 2sls estimator of nagar 1959 provides a poor correction when instruments are very weak given that the theory and techniques mentioned above were discovered and developed after mauro wrote his qje paper we attempt to reproduce his results and analyze them in light of these recent findings from the early work of left 1964 and huntington 1968 corruption in government has been of great interest to economists these studies argue that corruption could be positively correlated with economic performance in the presence of a thick and cumbersome bureaucracy corruption in this view greases the wheels of bureaucracy thus increasing the efficiency in which transactions occur leading to a positive effect on the economic performance of a country on the other hand rose ackerman 1978 murphy shleifer and vishny 1991 1993 and shleifer and vishny 1993 provide theoretical arguments that corruption deteriorates economic growth through the misallocation of talent and other resources mauro 1995 being the first to introduce instrumental variables ivs in the cross country growth literature contributes to this debate by examining empirically the relationship between two measures of corruption and investment and economic growth his results suggest that corruption has a negative impact on investment and economic growth the significance of his results varies with model specifications but the results appear to be robust when correcting for the endogeneity of corruption using the ethnolinguistic fractionalization elf index as an iv he employs 2sls estimation to correct for endogeneity created by the two measures of corruption mauro 1995 s work has been of great value in the corruption literature and has had profound influence on the direction of policy making the paper is one of the most cited papers not just in the literature on corruption but in economics in general 1 given the impact that the paper has undoubtedly had on the direction of research we find it necessary and relevant to revisit the paper in light of the recent developments in the field of econometrics

governance and renewable energy investment in mena countries how does trade matter abstract the middle east and north africa mena countries have recently developed renewable energy re markets however their rate of investment in renewable energy remains small compared to other regions in the world despite their relatively abundant endowments particularly in wind and solar while the literature identifies some barriers to investment in renewable energy we assume that the investment of mena countries could be impeded by specific governance factors furthermore we consider recent literature showing that trade openness reduces the negative effects of weak governance in this paper we empirically investigate the link between governance openness and renewable energy investment in the mena region using panel data for 15 mena countries over the period 1996 2013 our results prove that high institutional quality is associated with re investment in mena countries in addition this relationship seems to be conditional on the trade regime our results are robust to several measures of renewable energy investment and governance as well as to an alternative econometric set up

the political economy of pollution taxes in a small open economy abstract this paper develops a positive theory explaining pollution tax policy outcomes in a small open economy the equilibrium tax rate depends on lobby group membership the relative importance of lobbying activities and the tax elasticity of pollution the equilibrium properties are investigated the model is extended to incorporate pollution abatement and a pollution abatement subsidy we show that total pollution may be increasing in the pollution abatement subsidy rate this effect arises because the equilibrium pollution tax rate may be decreasing in the subsidy rate due to altered political influence of the lobby groups in the political equilibrium

to ban or not to ban foreign lobbying and cross national externalities this paper studies the costs and benefits of foreign lobbying we show how and when foreign lobbying can help internalize cross national externalities we argue that this is an often overlooked benefit of foreign lobbying we also study under what conditions a constitutional rule banning foreign lobbying is in the national interest of a country a key factor in this calculus is whether the interests of foreign lobby groups and domestic unorganized groups coincide or not we illustrate the logic with examples from trade policy and environmental regulation bannir ou ne pas bannir lobbying etranger et effets externes transnationaux ce texte etudie les couts et avantages du lobbying etranger on montre quand et comment que le lobbying etranger peut aider a internaliser des effets externes transnationaux on suggere que c est souvent un avantage qu on est porte a negliger du lobbying etranger on etudie sous quelles conditions une regle constitutionnelle bannissant le lobbying etranger peut etre dans l interet national d un pays un facteur cle dans ce calcul est le fait que les interets des groupes etrangers coincident ou non avec ceux des groupes nationaux non organises on illustre la logique sous jacente a l aide d exemples portant sur la politique commerciale et la reglementation environnementale

voting on the budget deficit this paper analyzes a model in which a group of rational individuals votes over the composition and time profile of public spending all voters agree that a balanced budget is ex ante optimal however if there is disagreement between current and future majorities a balanced budget is not a political equilibrium under majority rule under certain conditions a majority of the voters favors a budget deficit and the equilibrium deficit is larger the greater is the polarization among voters copyright 1990 by american economic association

an empirical study of the impact of corruption on environmental performance evidence from panel data this paper extends the empirical debate on the effects of corruption on environmental degradation by considering a recently available measure of environmental quality the environmental performance index this indicator is more comprehensive than the measures of air pollutant emissions commonly used in the literature and in particular can also capture the impact of pollution on human health this allows for a better understanding of the actual effects of a wide range of human activities on the ecosystem from a panel data analysis two regularities emerge first corruption deteriorates the overall environmental quality this effect is robust and persistent second our findings highlight the improvement of environmental quality as income rises even at an initial level of development this is not in contradiction with the ekc hypothesis because an increase in income levels provides positive externalities on the whole environmental quality by compensating the mere negative effects induced by industrialization on the emission levels as a consequence in emerging economies policies fighting corruption and enhancing development are very likely to improve the environmental performances

corruption pollution and the kuznets environment curve abstract this paper examines the implications of corruption and rent seeking behavior by the government for the relationship between pollution and growth cases of both cooperative and non cooperative interaction between the government and the private firm are studied it is shown that corruption is not likely to preclude the existence of an inverted u shaped kuznets environmental curve under both these cases however for any level of per capita income the pollution levels corresponding to corrupt behavior are always above the socially optimal level further the turning point of the kuznets curve takes place at income and pollution levels above those corresponding to the social optimum

the impact of environmental regulation shadow economy and corruption on environmental quality theory and empirical evidence from china abstract mounting environmental pressures led china to focus on the effectiveness of the environmental regulation to control pollution since the shadow economy or underground economic activities that are not included in official statistics accounts for an increasing fraction of china s economy its impacts on environmental quality should be carefully evaluated in this study the main research questions are as follows 1 what is the extent of the effect of environmental regulation on environmental quality and 2 what are the factors that influence the impact of environmental regulation on environmental pollution a theoretical model is developed to explain the relationship among the environmental regulation shadow economy and environmental quality in china an empirical analysis is conducted to test the three propositions of the model thereby examining the explanatory power of the theoretical model concretely using panel data from 30 provinces for the period of 1998 2012 the generalized method of moments gmm method is employed to control for potential endogeneity and introduce dynamic effects the estimation results indicate that stringent environmental regulation and the level of the shadow economy are both positively related to china s environmental pollution however the results also indicate that tighter environmental control would help reduce pollution at a given level of the shadow economy moreover an increase in the proportion of corrupt officials may weaken the environmental regulation which would consequently lead to the increase in illegal production and total pollutant emissions besides many economic and social factors may also affect the environmental quality for instance the development of secondary industry contributes toward an increase in pollutant emissions however increased research and development r d spending on eco friendly industrial operations can help to reduce pollution

aspects of governance and hbox co _2 co 2 emissions a non linear panel data analysis the reduction of hbox co 2 emissions has been at the centre of worldwide debates on environmental issues though its inclusion as one of the millennium development goals mdgs by the united nations has changed the focus of relative literature among many one of the world bank s recipes to achieve a higher position toward mdgs has been to undertake reforms for a better governance while the majority of researches focus has been on one single aspect and its relationship with the environment some studies have simultaneously considered two governance dimensions in this paper we focus on the role of several aspects of governance on hbox co 2 emissions this provides us with a chance to explore the possible impacts of all aspects of governance on a more direct measure of emissions that is different to previous researches which have focused on the indirect transmission and considered the maximum of two using the iv method within panel data analysis we show that only one single aspect of governance control of corruption has a negative significant effect on hbox co 2 emissions and its effect has a non linear relationship the non linearity exists in both parametric and nonparametric analysis after controlling for endogeneity

inefficient equilibria in lobbying lobbying is often represented as a common agency game common agency games typically have multiple equilibria one class of equilibria called truthful has been identified by bernheim and whinston quarterly journal of economics 1986 101 1 1 31 in this paper we identify another class of equilibria which we call natural in which each principal offers a positive contribution on at most one alternative we run an experiment on a common agency game for which the two equilibria predict a different equilibrium alternative the alternative predicted by the natural equilibrium is chosen in 65 of the matches while the one predicted by the truthful equilibrium is chosen in less than 5 of the matches 2001 elsevier science b v all rights reserved