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

olson s exploitation hypothesis in a public good economy a reconsideration since the publication of olson s 1965 the logic of collective action the exploitation hypothesis in which the rich shoulder the provision burden of public goods for the poor has held sway despite empirical exceptions to address such exceptions we establish two alternative exploitation hypotheses based on contributors asymmetric preferences or on their productivity differences regarding the public good the classic hypothesis and its two variants are proven in a novel fashion for asymmetric preferences we also establish the exploitation hypothesis for the joint products model with private and public co benefits our theoretical insights are then illustrated by some empirical examples from the field of international public goods such as military defense and cross border pollution

environmentalism democracy and pollution control this paper makes two empirical contributions to the literature based on predictions generated by a lobby group model first we investigate how environmental lobby groups affect the determination of environmental policy in rich and developing countries second we explore the interaction between democratic participation and political electoral competition the empirical findings suggest that environmental lobby groups tend to positively affect the stringency of environmental policy moreover political competition tends to raise policy stringency in particular where citizens participation in the democratic process is widespread

dynamic climate policy with both strategic and non strategic agents taxes versus quantities we study a dynamic game where blocs of fossil fuel importers and exporters exercise market power using taxes or quotas a non strategic fringe of emerging and developing countries consume and produce fossil fuels cumulated emissions from fossil fuel consumption create climate damages we examine markov perfect equilibria under the four combinations of trade policies and compare these to the corresponding static games taxes dominate quotas for both the strategic importer and exporter the fringe is better off under taxes than quotas because taxes result in lower fuel prices and less consumption by the strategic importer lowering climate damages

economics of alliances the lessons for collective action this essay provides an up to date summary of the findings of the literature on the economics of alliances we show that the study of the economics of alliances has played a pivotal role in understanding and applying public good analysis to real world applications we establish that the manner in which alliances address burden sharing and allocative issues is related to strategic doctrines weapon technology perceived threats and membership composition past contributions are evaluated and areas needing further development are identified the theoretical and empirical knowledge gained from the study of alliances is shown to be directly applicable to a wide range of international collectives

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

identifying the free riders a simple algorithm for determining who will contribute to a public good abstract when a heterogeneous group of people provide themselves with a pure public good the resulting nash equilibrium outcome will divide the group into contributors and free riders this paper proposes a general algorithm for discovering which individuals in the group fall into which of these two classes the algorithm is based on identifying for each individual how much of the public good must be provided by others to drive that individual s contribution to zero

the tragedy of the commons in international fisheries an empirical examination abstract historically all capture fisheries have proven hard to manage internationally shared stocks face an additional impediment to effective management previous fisheries studies estimate gains from cooperation for particular species or locations but evidence is lacking on the wider effect that international sharing has in relation to other variables that affect stock status this paper is an attempt to shed a broader light on the effect of sharing by identifying whether shared fish stocks are systematically more exploited i compile exploitation status biological and economic data into a unique two period panel of more than 200 fish stocks from around the globe with which i test the theoretical implications of sharing the empirical results from ordered category estimation suggest that shared stocks are indeed more prone to overexploitation

strategic interaction among governments in the provision of a global public good abstract how do governments respond to other governments when providing a global public good using data from 2007 to 2014 on medical research funding for infectious and parasitic diseases we examine how governments and foundations in 41 countries respond to funding changes by the us government which accounts for half of funding for these diseases because funding across governments might be positively correlated due to unobserved drivers they have in common we use variation in the representation of research intensive universities on us congressional appropriations committees as an instrument for us funding we find that a 10 increase in us government funding for a disease is associated with a 2 to 3 reduction in funding for that disease by another government in the following year

inter regional competition comparative advantage and environmental federalism in this paper we compare endogenous environmental policy setting with centralized and decentralized governments when regions have comparative advantages in different polluting goods we develop a two region two good model with inter regional environmental damages and perfect competition in product markets where both regions produce both goods despite positive spillovers of pollution across regions the model predicts that decentralization may lead to weaker or stricter environmental standards or taxes depending on the degree of regional comparative advantage and the extent of transboundary pollution this suggests that federalism can lead to either a race to the bottom or a race to the top without relying on inefficient lobbying efforts or capital competition resume concurrence inter regionale avantage comparatif et federalisme environnemental dans ce texte les auteurs comparent l appareil de definition de politique environnementale endogene pour des gouvernements centralises et decentralises quand les regions ont des avantages comparatifs dans la production de divers biens polluants on developpe un modele a deux regions et a deux biens operant dans un cadre ou existent 1 des effets de retombees inter regionales toxiques pour l environnement 2 concurrence parfaite dans les marches des produits et 3 ou les deux regions produisent les deux biens malgre les effets de pollution entre regions le modele predit que la decentralisation peut entrainer des standards et des taxes portant sur l environnement qui sont soit plus faibles ou plus forts selon le degre d avantage comparatif regional et la nature de la pollution transfrontiere on suggere que le federalisme peut conduire a une emulation soit vers le bas soit vers le haut sans avoir a avoir recours a des efforts de lobbying inefficaces ou a la concurrence pour le capital pour expliquer le resultat

international spillovers and water quality in rivers do countries free ride transboundary spillovers may degrade environmental quality if countries free ride this paper examines the extent of such degradation in water quality in international rivers using data from river monitoring stations in the un s global emissions monitoring system gems it compares pollution levels in international and domestic rivers the results suggest that free riding may substantially increase pollution in international rivers but the estimates are sensitive to the inclusion of country effects this abstract was borrowed from another version of this item

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

jointly reforming the prices of industrial fuels and residential electricity in saudi arabia abstract the saudi electricity sector currently buys fuel and sells electricity at prices administered by the government in this analysis we illustratively explore combining the reform of the fuel prices used in power plants with the implementation of alternative electricity pricing schemes for the households compared to the scenario replicating the year 2015 we find the aggregate gain to the energy system could reach nearly 12 billion per year by raising both electricity prices to households and industrial fuels to reflect the cost of supply or international markets households would pay an additional 3 billion in electricity costs without any mitigation for the low income households however lifeline prices would halve this burden while maintaining greater gains than deregulating fuel prices alone the average electricity price paid under the lifeline scenario would be a more manageable 4 0 cents kwh versus an average marginal cost price of 7 1 cents kwh in the alternative electricity pricing scenarios we study natural gas usage by the power utilities falls allowing gas to flow to other industries which would consume it to reduce their costs we find the marginal values of natural gas falling at higher electricity prices indicating that the supply of gas is becoming less constraining

international emissions trading with endogenous allowance choices abstract this paper compares endogenous choices of tradable and non tradable emission allowances by non cooperative countries i find that the cost savings of trading do not necessarily lead to less pollution in particular environmentally more concerned countries usually choose less allowances if these are tradable but this may be offset by the choice of more allowances on the side of environmentally less concerned countries moreover if the establishment of a trading system requires the unanimous approval of all countries there may be no agreement on trading even if it were to lead to less pollution overall conversely a trading system may find unanimous approval even if it induces more pollution

informational benefits of international treaties international treaties allow a minister in one country to learn about the beliefs held by a minister in another country so allowing each to make better decisions when the net benefits of environmental policy are uncertain a country which participates in negotiating an environmental treaty or which supports strong environmental action thereby provides information to another country that such action can be worthwhile this dimension of international environmental agreements helps explain why countries negotiate treaties why these treaties often implement the nash non cooperative equilibrium why agreement to a treaty by a country deemed not particularly favorable to it can strengthen environmental action and why treaties may invoke a minimum participation clause the informational mechanism we discuss holds even if physical spillovers are absent and even if monitoring and enforcement are infeasible our approach can explain additional phenomena how requirements for approval by several bodies within a country can increase support for a policy and why simultaneous action can lead to better outcomes than sequential action

winners and losers in a world with global warming noncooperation altruism and social welfare abstract in this paper global warming is an asymmetric transboundary externality which benefits some countries or regions and harms others we use a simple two country model to analyze the effects of global warming on resource allocations the global warming stock and national and global welfare

the impact of equity preferences on the stability of international environmental agreements this paper uses a coalition formation model to explore how equity considerations affect countries cooperation on global environmental issues e g on climate change when developing countries are exempted from obligations to reduce their emissions i find that opening them for abatement projects financed by industrialized countries changes the incentives to cooperate in a way which can increase emissions and decrease welfare equity concerns in industrialized countries regarding the difference between their per capita emission levels and those of developing countries lead to increased abatement but do not qualitatively change the incentives to cooperate inequality aversion with respect to differences to abatement targets across industrialized countries generally induces larger coalition sizes and stricter abatement here the inclusion of developing countries improves upon the prospects of cooperation

international environmental agreements and strategic voting two anonymous referees have provided very valuable comments and suggestions we have also benefited from discussions at seminars at the universities of bonn dortmund and dresden and at the conferences of euresco the european economic association and the verein fur socialpolitik this paper was partly written while haupt was visiting the economics department at the university of colorado at boulder he is very grateful to the members of the department particularly to eckhard janeba for their hospitality and for stimulating discussions and to the fritz thyssen stiftung for funding his research visit we also thank the deutsche forschungsgemeinschaft dfg for financial support

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

strategic information acquisition and the mitigation of global warming abstract we consider the strategic role of uncertainty and information acquisition for the mitigation of global warming before the countries decide on their contribution to a mitigation of global warming they may invest in information about the country specific benefit of reductions of the emissions of greenhouse gases we show that information acquisition has a substantial strategic value countries may prefer not to learn their benefit of climate protection even if information acquisition does not involve a direct cost this strategic information choice may further decrease the efficiency of the public good provision

why cooperate public goods economic power and the montreal protocol this paper develops a correlated probit model to describe dichotomous choices that may contain a public goods component or some other forms of interdependency the key contribution of the paper is to formulate tests for interdependent behavior among agents in particular we examine the decisions by nations whether or not to ratify the montreal protocol on substances that deplete the ozone layer specifically we reject free riding as a motive for not ratifying the protocol and we find little evidence that individual nations were influenced by the behavior of their largest trading partners hence the data suggest that with respect to the montreal protocol most nations acted without regard for the actions of other nations

the participation decision versus the level of participation in an environmental treaty a spatial probit analysis abstract this paper represents treaty participation as a two stage game for which nations first decide whether or not to participate and then they choose their level of participation the resulting subgame perfect equilibrium is used to derive a reduced form equation for estimating and separating the influences of the variables at the two decision stages this spatial probit equation forms the basis for a full information maximum likelihood estimator that accounts for the simultaneity bias associated with public good spillins at both stages when the procedure is applied to the helsinki protocol we find that the strategic influence of a variable may drastically differ depending upon which stage is scrutinized

sunk capital and negotiated resolutions of environmental conflicts two nations seek a cooperative agreement to control bilateral flows of an industrial pollutant from previous noncooperative production choices the nations hold a certain amount of sunk capital if production requires relatively large investments in sunk capital the nations may find that they cannot negotiate production quotas that improve on their noncooperative choices when the nations find cooperation worthwhile negotiated levels of production will be higher than in the absence of sunk capital furthermore both nations are motivated to attempt to manipulate the terms of the agreement by making strategic investments in sunk capital prior to its completion