Legislative Organization and Pollution Taxation
- 153 Downloads
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.
KeywordsEnvironmental policy Veto players Bicameralism Corruption Taxes
Unable to display preview. Download preview PDF.
- Bardhan, P. (1997). Corruption and development: A review of issues. Journal of Economic Literature, 35, 1320–1346.Google Scholar
- Bitler, M.P., Gelbach, J.B., & Hoynes, H.W. (2005). What mean impacts miss: Distributional effects of welfare reform experiments. American Economic Review, forthcoming.Google Scholar
- Bradbury, J.C., Crain, W.M., & Mueller, D. C. (2006). Bicameralism and political compromise in representative democracy. In R. Congleton & B. Swedenborg (Eds.), Democratic Constitutional Design and Public Policy. Analysis and Evidence (pp. 189–202). Cambridge: MIT Press.Google Scholar
- Congleton, R.D. (2003). On the merits of bicameral legislatures: Policy predictability within partisan polities. In M. J. Holler, H. Kliemt, D. Schmidtchen, & M. E. Streit (Eds.), European Governance, Year Book of New Political Economy (vol. 22), Tübingen, Germany: Mohr Siebeck.Google Scholar
- Congleton, R.D. (2006). On the merits of bicameral legislatures: Intragovernmental bargaining and policy stability. In R. Congleton & B. Swedenborg (Eds.), Democratic Constitutional Design and Public Policy. Analysis and Evidence (pp. 163–188). Cambridge: MIT Press.Google Scholar
- Diermeier, D., Eraslan, H., & Merlo, A. (2002). Bicameralism and Government Formation. Unpublished manuscript, University of Pennsylvania.Google Scholar
- Europa Publications (1997). The environment encyclopedia and directory. London: Europa Publications Limited.Google Scholar
- Firpo, S. (2005). Efficient semiparametric estimation of quantile treatment effects. Econometrica, forthcoming.Google Scholar
- Heckman, J.J., Lalonde, R.J., & Smith, J.A. (1999). The economics and econometrics of active labor market programs. In O. Ashenfelter & D. Card, (Eds.), Handbook of Labor Economics (vol. 3, pp. 1865–2097). Amsterdam: Elsevier.Google Scholar
- Kaufmann, D., Kraay, A., & Mastruzzi, M. (2003). Governance matters III: Governance indicators for 1996–2002. World Bank Policy Research Working Paper # 3106, The World Bank.Google Scholar
- OECD/IEA (2000). Energy policies of IEA countries. 2000 review. (Paris: Organization for Economic Cooperation and Development and International Energy Agency. Available at http://www.iea.org/books-countries/2000/comp2000.pdf).
- Olson, M. (1965). The Logic of Collective Action. Cambridge: Harvard University Press.Google Scholar
- Schulze, G., & Ursprung, H. (2001). The political economy of international trade and the environment. In G. Schulze & H. Ursprung (Eds.), International Environmental Economics: A Survey of the Issues. Oxford: Oxford University Press.Google Scholar
- Tanzi, V., & Davoodi, H. (1997). Corruption, public investment and growth. IMF Working Paper 97/139 (Washington, D.C: IMF.)Google Scholar
- Tsebelis, G. (2002). Veto players: How political institutions work. Cambridge, MA: MIT Press.Google Scholar
- Tsebelis, G., & Money, J. (1997). Bicameralism. New York: Cambridge University Press.Google Scholar
- Wooldridge, J.M. (1999). Estimating average partial effects under conditional moment independence assumptions. Unpublished manuscript, Michigan State University.Google Scholar
- Wooldridge, J.M. (2002). Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.Google Scholar