The Political Economy of Coastal Development

75 Pages Posted: 11 May 2021

See all articles by Pierre Magontier

Pierre Magontier

University of Bern

Albert Sole-Olle

University of Barcelona; CESifo (Center for Economic Studies and Ifo Institute)

Elisabet Viladecans Marsal

University of Barcelona

Multiple version iconThere are 2 versions of this paper

Date Written: 2021

Abstract

We study the role of political parties as facilitators of intergovernmental cooperation regarding the development of coastal land. Slowing down this development has benefits (e.g., preservation of environmental amenities) and costs (e.g., job losses), not only for residents in the political jurisdiction but also for non-residents. Local governments may not consider the welfare of non-residents and therefore may not choose the right amount of development. This paper investigates how political alignment between mayors of nearby municipalities enhances the incentives to cooperate and affect development in coastal areas. We rely on high-quality administrative data from the cadaster on the amount of built-up land along the Spanish coast. Using a close-elections regression discontinuity design, we find that municipalities with mayors belonging to the ideological bloc governing a majority of municipalities in the coastal area develop less land than other municipalities. The effect is larger for land close to the coastline and in places with a large share of environmentally valuable land. This suggests that negative externalities are dominant in this context and that political parties are a useful tool to internalize them.

JEL Classification: D720, H700, R520

Suggested Citation

Magontier, Pierre and Sole-Olle, Albert and Marsal, Elisabet Viladecans, The Political Economy of Coastal Development (2021). Available at SSRN: https://ssrn.com/abstract=3842323 or http://dx.doi.org/10.2139/ssrn.3842323

Pierre Magontier (Contact Author)

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland

Albert Sole-Olle

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Elisabet Viladecans Marsal

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

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