Chakraborty, Lekha S (2006): Determining Environmental Quality in a Federal Setting: An Empirical Analysis of Subnational Governments in India.
Download (189kB) | Preview
Against the analytical backdrop of environmental federalism, the paper examines the impact of fiscally decentralized public policy stance on environmental quality in India. Unlike many studies which analysed the fiscally decentralized determination of environmental welfare from tax-side through modeling interjurisdictional competition and ‘race to bottom’, this paper attempts to look at the link from public expenditure side in a Kuznets’ U specification. The paper does not refute the widely explored Kuznets U phenomenon between economic growth and the environmental quality, rather it emphasizes that it does substantially through conscious public policies on reforestation and pollution abatement with adequate public expenditure decisions. Using GSLS and fixed effects model of pooled least squares for the late 1990s, the analysis of the link between decentralized environmental expenditure in per capita terms and the environmental quality indicators for the forestry sector revealed that there is a positive functional relationship between the variables. The models also revealed the effectiveness of economic growth variables in creating the Kuznet’s U effect on environmental quality. However, the panel estimates showed that fiscal policy has a stronger impact on environmental quality than the Kuznets U-impact of economic growth. This result is in confirmation with the trend that fiscal policies on environmental capital formation gets transformed to the end results of better environmental quality indicators, despite the constraints of initial negative impacts of economic growth on ecology.
|Item Type:||MPRA Paper|
|Original Title:||Determining Environmental Quality in a Federal Setting: An Empirical Analysis of Subnational Governments in India|
|Keywords:||environmental federalism, fiscally decentralized public policy stance, Kuznets’ U specification|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models
|Depositing User:||Lekha S Chakraborty|
|Date Deposited:||10. Mar 2008 12:17|
|Last Modified:||22. Feb 2013 11:40|
Adler, Jonathan, H (1998): A New Environmental Federalism", Forum for Applied Research and Public Policy, Vol. 13.
Anderson, Terry L. and. Hill, Peter J (1996):" Environmental Federalism: Thinking Smaller", PERC Policy Series, Issue Number PS-8, December 1996,
Cropper, M and C. Griffiths (1994): The interaction of population growth and environmental quality, American Economic Review, 84: 250-254
Dasgupta, Partha and Maler, Goran-Karl (ed.) (1997): ‘The Environment and Emerging Development issues’, Volume 2, Claredon Press Oxford.
Divan, S And Rosencranz (2001): Environmental Law And Policy In India’, Oxford University Press.
Grossman, G M and A B Kruger (1995): ‘Economic Growth and the Environment’, Quarterly Journal of Economics, 112:353-378
Levinson, Arik (): 'Environmental Federalism: Interpreting Some Contradictory Results", Georgetown University, Washington DC.
Millimet (forthcoming):"Assessing the Empirical Impact of Environmental Federalism." Journal of Regional Science, forthcoming.
Subrata Mandal and M. Govinda Rao (2005): Overlapping Fiscal Domains and Effectiveness of Environmental Policy in India, NIPFP Working paper No:25.
Oates, Wallace (1998): "Environmental Federalism in United States: Principles, Problems and Prospects", National Centre for Environment Decision Making (NCEDR).
Oates, Wallace (1998): "Thinking about Environmental Federalism", Resources for Future 130. Winter 1998.
Oates, Wallace (2001): "A Reconsideration of Environmental Federalism", Discussion Paper 01-54, Resources for the Future, Washington, D.C.
Oates, Wallace E. and Robert M. Schwab (1988): “Economic Competition Among Jurisdictions: Efficiency Enhancing or Distortion Inducing,” Journal of Public Economics 33(1988): 333-354.
Panagariya, A, Portney, P P and Schwab R M (1999): ‘Environmental and Public Economics’, Essays in honor of Wallace E Oates, EE Publication.
Royster, Judith V (199):" Environmental Federalism and The Third Sovereign: Limits On State Authority To Regulate Water Quality In Indian Country",
Shafik, N (1994): Economic development and environmental quality: an econometric analysis’, Oxford Economic Papers, 46:757-773
Smith, Kerry; Schwabe, Kurt A. and Mansfield, Carol (1997): "Does Nature Limit Environmental Federalism?" Working Paper 97-01, Department of Economics, Duke University, Durham.
Suri, V and Chapman (1998): “Economic growth, trade and energy: implications for the Environmental Kuznets Curve’, Ecological Economics, 25: 147-160
Thorsten, Upmann Bayindir (1998): ‘Fiscal Policy and Environmental Welfare: Modeling Interjurisdictional Competition’, Edward Elgar Publication.