This paper studies fiscal federalism when regions differ in voters’ ability to monitor public officials. We develop a model of political agency in which rent-seeking politicians provide public goods to win support from heterogeneously informed voters. In equilibrium, voter information...

In this Paper we explore to what extent secondary policy issues are influenced by electoral incentives. We develop a political agency model in which a politician decides on both a frontline policy issue, such as the level of public spending, and a secondary policy issue, such as environmental...

We analyse how, in representative democracies, income distribution influences the stringency of environmental policy and economic growth. Individuals (who differ in abilities) live for two periods, working when young and owning capital when old. Externalities are caused by a polluting factor....

We analyse the impact of micro-founded political institutions on environmental policy and economic growth. We model an overlapping-generations economy, where individuals differ in preferences over the environment (as well as in age). Labour taxation and capital taxation is used to finance a...

This Paper explores the relationship between environmental protection and international capital movements, when tax policy is endogenous (through voting). A two-period general equilibrium model of a small open economy is specified to compare the effects of two different constitutions (commitment...

In this paper I analyse the incentives for governments and producers to act strategically in imperfectly competitive markets when there is Bertrand competition. Strategic behaviour by governments takes the form of distortions to their environmental policy from the first-best rule of equating...

Does international tax competition in the environmental field lead to undesirably low levels of environmental regulation and to unacceptable standards of environmental quality? The paper attempts to answer this question in a non-competitive partial-equilibrium framework. There is one firm that...

This paper addresses two basic issues related to technological innovation and climate stabilisation objectives: i) Can innovation policies be effective in stabilising greenhouse gas concentrations? ii) To what extent can innovation policies complement carbon pricing (taxes or permit trading) and...

There has been much debate recently about the nature of environmental policy that will be set by governments concerned about the competitive advantage their industries might obtain in a world of fierce trade competition. Some claim governments will set environmental policies that are too lax,...

Widespread concern has been expressed that the costs of reducing environmental pollution in Eastern Europe will divert resources that would otherwise be available for industrial modernization. In fact, apart from a number of severely damaged areas, the general level of exposure to major...