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Environmental Quality and Industry Protection with Noncooperative Versus Cooperative Domestic and Trade Policies

Environmental Quality and Industry Protection with Noncooperative Versus Cooperative Domestic and... This paper characterizes environmental quality and industry protection in a large‐country Grossman–Helpman model when production or consumption externalities exist and governments decide noncooperatively or cooperatively on domestic and trade policies. Governments choose policies efficiently from among those available, but competitive lobbies may prefer less efficient regimes. Under restricted policy availability, political‐support effects can offset terms‐of‐trade effects on equilibrium outcomes, and inefficient trade policies can lead to higher environmental quality than efficient domestic policies. If governments cooperate, they can satisfy particular organized industries at lower costs to other lobbies and total welfare. This may result in lower environmental quality than noncooperation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of International Economics Wiley

Environmental Quality and Industry Protection with Noncooperative Versus Cooperative Domestic and Trade Policies

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References (16)

Publisher
Wiley
Copyright
Copyright © 2000 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0965-7576
eISSN
1467-9396
DOI
10.1111/1467-9396.00250
Publisher site
See Article on Publisher Site

Abstract

This paper characterizes environmental quality and industry protection in a large‐country Grossman–Helpman model when production or consumption externalities exist and governments decide noncooperatively or cooperatively on domestic and trade policies. Governments choose policies efficiently from among those available, but competitive lobbies may prefer less efficient regimes. Under restricted policy availability, political‐support effects can offset terms‐of‐trade effects on equilibrium outcomes, and inefficient trade policies can lead to higher environmental quality than efficient domestic policies. If governments cooperate, they can satisfy particular organized industries at lower costs to other lobbies and total welfare. This may result in lower environmental quality than noncooperation.

Journal

Review of International EconomicsWiley

Published: Nov 1, 2000

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