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The multiplier effect of globalization

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  • Richard Damania
  • Per Fredriksson
  • John List

Abstract

This study uses a three-stage common agency model to explore the linkages between trade policy, corruption and environmental policy in an imperfect market setting. We show that the effect of trade liberalization on the stringency of environmental policy depends critically on the level of corruption-in relatively corrupt countries, trade openness leads to more stringent environmental policy. In such countries, this interaction, therefore, lends trade liberalization a type of "multiplier effect," raising both economic growth and environmental policy stringency.

Suggested Citation

  • Richard Damania & Per Fredriksson & John List, 2004. "The multiplier effect of globalization," Natural Field Experiments 00497, The Field Experiments Website.
    • Handle: RePEc:feb:natura:00497
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    2. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    3. Katrin Millock & Natalia Zugravu & Gérard Duchene, 2008. "The Factors Behind CO2 Emission Reduction in Transition Economies," Working Papers 2008.58, Fondazione Eni Enrico Mattei.
    4. Bontems, Philippe & Cheikbossian, Guillaume & Hafidi, Houda, 2024. "Environmental Tax Competition and Welfare: The Good News about Lobbies," TSE Working Papers 24-1551, Toulouse School of Economics (TSE).
    5. Emma Aisbett & Magdalene Silberberger, 2021. "Tariff liberalization and product standards: Regulatory chill and race to the bottom?," Regulation & Governance, John Wiley & Sons, vol. 15(3), pages 987-1006, July.
    6. Bernard, Sophie & Hotte, Louis & Winer, Stanley L., 2014. "Democracy, inequality and the environment when citizens can mitigate health consequences of pollution privately or act collectively," European Journal of Political Economy, Elsevier, vol. 34(C), pages 142-156.
    7. Athanasios Kampas & Katarzyna Czech & Stelios Rozakis, 2021. "Do Globalisation and Environmental Policy Stringency affect the Environmental Terms of Trade? Evidence from the V4 countries," Working Papers 2021-1, Agricultural University of Athens, Department Of Agricultural Economics.

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