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Public Choice

, Volume 131, Issue 1–2, pp 217–242 | Cite as

Legislative Organization and Pollution Taxation

  • Per G. FredrikssonEmail author
  • Daniel L. Millimet
Original Article

Abstract

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.

Keywords

Environmental policy Veto players Bicameralism Corruption Taxes 

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Copyright information

© Springer Science+Business Media, LLC 2006

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of LouisvilleLouisvilleKentucky
  2. 2.Southern Methodist UniversityTexasUSA

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