Dynamic Environmental Policy in Developing Countries with a Dual Economy

International Review of Economics and Finance, Vol. 11, No. 2, pp. 191-206, 2002

Posted: 13 Jun 2002

See all articles by Dug Man Lee

Dug Man Lee

Konkuk University

Amitrajeet A. Batabyal

Rochester Institute of Technology (RIT) - Department of Economics

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Abstract

We study an intertemporal model of environmental policy in a developing country with a dual economy. This developing country's economy is distorted because, among other things, the government subsidizes the exports of the sector of the economy that does not pollute. We study the output and employment effects of three separate pollution taxes. These taxes incorporate different assumptions about the DC government's ability to commit to its stated policy. We delineate the taxes, we analyze the dependence of these taxes on the present distortion, and we specify the scenarios which call for an activist policy, irrespective of the length of time to which the government can commit to its stated policy. Among other things, our study demonstrates why some developing country governments may not be serious about pollution control policies.

Note: This is a description of the paper and is not the actual abstract.

Keywords: Commitment, Developing Country, Environmental Policy, Export Subsidy

JEL Classification: O20, Q20

Suggested Citation

Lee, Dug Man and Batabyal, Amitrajeet A., Dynamic Environmental Policy in Developing Countries with a Dual Economy. International Review of Economics and Finance, Vol. 11, No. 2, pp. 191-206, 2002, Available at SSRN: https://ssrn.com/abstract=315860

Dug Man Lee

Konkuk University ( email )

380-701 Chungju
Korea

Amitrajeet A. Batabyal (Contact Author)

Rochester Institute of Technology (RIT) - Department of Economics ( email )

92 Lomb Memorial Drive
Rochester, NY 14623-5604
United States
585-475-2805 (Phone)
585-475-5777 (Fax)

HOME PAGE: http://people.rit.edu/aabgsh

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