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Is inequality harmful for the environment in a growing economy?

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Abstract

In this paper we investigate the relationship between inequality and the environment in a growing economy from a political economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is done in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment : the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth

Suggested Citation

  • Hubert Kempf & stéphane Rossignol, 2005. "Is inequality harmful for the environment in a growing economy?," Cahiers de la Maison des Sciences Economiques v06045, Université Panthéon-Sorbonne (Paris 1), revised May 2006.
    • Handle: RePEc:mse:wpsorb:v06045
    DOI: 10.1111/j.1468-0343.2007.00302.x
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    1. Marsiliani, L. & Renstrom, T.I., 2000. "Inequality, Environmental Protection and Growth," Other publications TiSEM 4b2514ec-6e0c-448e-901a-a, Tilburg University, School of Economics and Management.
    2. van Marrewijk, Charles & van der Ploeg, Federick & Verbeek, Jos, 1993. "Is growth bad for the environment? Pollution, abatement, and endogenous growth," Policy Research Working Paper Series 1151, The World Bank.
    3. Hubert Kempf & Stéphane Rossignol, 2005. "Growth, Inequality, and Integration: A Political Economy Analysis," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 709-739, December.
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    More about this item

    Keywords

    Inequality; growth; environmental policy; political economy;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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