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Environmental Regulation and Development: A Cross-Country Empirical Analysis


Susmita Dasgupta


World Bank - Development Research Group (DECRG)

David Wheeler


World Bank - Policy Research Department

Ashoka Mody


International Monetary Fund (IMF) - Research Department

November 30, 1999

World Bank Policy Research Working Paper No. 1448

Abstract:     
Environmental protection has not been restricted to wealthy nations. Starting at the lowest level of development, regulation increases steadily with income per capita. The characteristic progression is from natural resource protection, through regulation of water pollution, to air pollution control.

Dasgupta, Mody, Roy, and Wheeler develop comparative indices of environmental policy and performance for 31 countries using a quantified analysis of reports prepared for the United Nations Conference on Environment and Development.

In cross-country regressions, they find a very strong, continuous association between their indicators and national income per capita, particularly when adjusted for purchasing power parity.

Their results suggest a characteristic progression in development. Poor agrarian economies focus first on natural resource protection. With increased urbanization and industrialization, countries move from initial regulation of water pollution to air pollution control.

The authors highlight the importance of institutional development. Environmental regulation is more advanced in developing countries with relatively secure property rights, effective legal and judicial systems, and efficient public administration.

This paper - a product of the Environment, Infrastructure, and Agriculture Division, Policy Research Department - is part of a larger effort in the department to study the relationship between environmental regulation and economic development. The authors may be contacted at sdasgupta@worldbank.org, amody@worldbank.org, or dwheeler1@worldbank.org.

Number of Pages in PDF File: 34

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Date posted: December 14, 2004  

Suggested Citation

Dasgupta, Susmita and Wheeler, David and Mody, Ashoka, Environmental Regulation and Development: A Cross-Country Empirical Analysis (November 30, 1999). World Bank Policy Research Working Paper No. 1448. Available at SSRN: http://ssrn.com/abstract=620638

Contact Information

Susmita Dasgupta (Contact Author)
World Bank - Development Research Group (DECRG) ( email )
1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-2679 (Phone)
202-522-3230 (Fax)
HOME PAGE: http://econ.worldbank.org/staff/sdasgupta
David Wheeler
World Bank - Policy Research Department ( email )
1818 H Street N.W.
Washington, DC 20433
United States
HOME PAGE: http://econ.worldbank.org/staff/dwheeler
Ashoka Mody
International Monetary Fund (IMF) - Research Department ( email )
700 19th Street NW
Washington, DC 20431
United States
202-623-9617 (Phone)
202-589-9617 (Fax)
HOME PAGE: http://www.amody.com
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