This thesis consists of a summary and four papers. The first two papers address political economy and industrial organization aspects of agricultural policy, and the last two international aspects of environmental policy. Paper [1] explains Common Agricultural Policy (CAP) subsidies to farmers...

This paper concerns provision of productive public inputs in the presence of unemployment. It is shown that if the government is able to implement optimal taxes on labor income and profit income, respectively, then the public input will be underprovided. On the other hand, if the government is...

This paper concerns optimal taxation and environmental policy in the presence of transboundary environmental damage and labour market distortions, where the latter gives rise to wage bargaining externalities between countries. I consider a decentralized economic federation where the federal...

We study how the optimal use of labor income tax progression depends on whether the wage bargaining system is decentralized or centralized. Assuming a nonlinear labor income tax and an unrestricted profit tax, we show that a Utilitarian government is able to implement the first best resource...

Earlier literature on tax competition and policy coordination typically assumes that the labor market is competitive; a description less suitable for Europe, where trade unions have had a strong position in the labor market for a long time. This paper concerns factor income taxation and public...

This paper concerns public provision of a private good in a two-type model with optimal nonlinear income taxation. We assume that the wage rates are determined by bargaining between unions and firms, meaning that the equilibrium is characterized by unemployment. We show that, if the labor market...

This paper analyzes the welfare consequences of coordinated tax reforms in an economy where a transboundary environmental externality and an international wage bargaining externality are operative at the same time. We assume that the wage in each country is decided upon in a bargain between...

This paper concerns optimal nonlinear labor income taxation in an economy with union wage setting and endogenous hours of work. The government is assumed to act in accordance with a utilitarian objective function. The main purpose of the paper is to study the determinants of tax progression and,...

This paper concerns redistribution and optimal taxation in an OLG model with two employed ability-types. We assume that the wage rates are determined by bargaining between unions and firms, implying that the equilibrium is characterized by unemployment. The tax instruments are nonlinear taxes on...

This thesis consists of an introductory chapter and four papers, which relate to environmental policy in the presence of transboundary environmental damage. Paper [I] concerns public policy in a multi-jurisdiction framework with transboundary environmental damage. Each jurisdiction is assumed...