Is Inequality Harmful for the Environment in a Growing Economy?

24 Pages Posted: 2 Feb 2005

See all articles by Hubert Kempf

Hubert Kempf

Ecole Normale Superieure de Cachan (ENS); National Research University Higher School of Economics (Moscow)

Stéphane Rossignol

Université de Versailles

Date Written: January 2005

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.

Keywords: inequality, Environment, Pollution abatement policy, Growth, Political economy

JEL Classification: D31, O11, Q50, Q58

Suggested Citation

Kempf, Hubert and Rossignol, Stéphane, Is Inequality Harmful for the Environment in a Growing Economy? (January 2005). Available at SSRN: https://ssrn.com/abstract=649568 or http://dx.doi.org/10.2139/ssrn.649568

Hubert Kempf (Contact Author)

Ecole Normale Superieure de Cachan (ENS) ( email )

61 avenue du président Wilson
Cachan, Paris 94235
France

National Research University Higher School of Economics (Moscow)

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Stéphane Rossignol

Université de Versailles ( email )

23 rue du refuge
78035 Versailles cedex, 78120
France

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