Secondary Issues and Party Politics: An Application to Environmental Policy

37 Pages Posted: 11 Jun 2008

See all articles by Vincent Anesi

Vincent Anesi

University of Nottingham

Philippe De Donder

University of Toulouse 1 - Toulouse School of Economics (TSE)

Date Written: April 2008

Abstract

The paper develops a political economy model to assess the interplay between political party formation and an environmental policy dimension viewed as secondary to the redistributive dimension. We define being a secondary issue in terms of the intensity of preferences over this issue rather than in terms of the proportion of voters who care for the environment. We build on Levy (2004) for the political equilibrium concept, defined as the solution to a two stage game where politicians first form parties and where parties then compete by choosing a policy bundle in order to win the elections.

We obtain the following results: i) The Pigouvian tax never emerges in an equilibrium; ii) The equilibrium environmental tax is larger when there is a minority of green voters; iii) Stable green parties exist only if there is a minority of green voters and income polarization is large enough relative to the saliency of the environmental issue. We also study the redistributive policies advocated by green parties.

Keywords: Electoral competition, income polarization, party formation, salience, stable green party

JEL Classification: D72, H23

Suggested Citation

Anesi, Vincent and De Donder, Philippe, Secondary Issues and Party Politics: An Application to Environmental Policy (April 2008). CEPR Discussion Paper No. DP6774, Available at SSRN: https://ssrn.com/abstract=1141679

Vincent Anesi (Contact Author)

University of Nottingham ( email )

School of Economics, Room B18,
SCG, University of Nottingham
Nottingham, NG7 1GD
United Kingdom

HOME PAGE: http://vincentanesi-economics.net/

Philippe De Donder

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

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