![]() ![]() Understanding this phenomenon has led to the development of a vibrant field of political science centered on the study of international institutions and IOs. The new global economy is highly institutionalized. Martin, in Handbook of Safeguarding Global Financial Stability, 2013 Conclusion Voter preferences, and thus the stringency of environmental quality, in this case, will depend on the relative strength of these two effects for the median voter. Thus, those voters who have some or all of their income tied to the dirty industry face a trade-off between declining real income and better environmental quality. However, if resources or job skills are not substitutable between the dirty and clean sectors, then dirty sector resources may become either underemployed or unemployed after more stringent environmental regulation is put in place. Like the clean sector voter, the dirty sector voter gets positive welfare from the more stringent environmental policy because of an improvement in environmental quality. Voters that have interests in the dirty sector now have competing effects on their personal welfare from supporting a candidate who favors a more stringent environmental policy. On the other hand, when there are many voters who are either fully, or partially, employed or own assets in the dirty sector, then the prediction regarding voting behavior is not as clear. ![]() If the median voter works or owns assets in the clean sectors, the majority will support the candidate who favors the more stringent environmental policy. They will vote for the candidate favoring more strict environmental regulation. For voters who have interests in the clean sector, there are no adverse affects to their asset or ownership returns. Furthermore, they can still buy dirty goods from foreign producers at the same prices as before. They will be better off (as all other voters too) because of a cleaner environment. ![]() Individuals who have interests in the clean industry have clear voting preferences. That is, a policy that will affect the costs to domestic producers of the dirty good, but would not affect goods produced in foreign locations. Candidates are running for office and the primary issue is the stringency of an import price neutral environmental policy. Let us further assume that there is an upcoming election. This implies that they own stock, land, capital, or other resources in the industry, or that they are just employed in an industry. Suppose that voters have interests in producing either polluting or nonpolluting goods. Voter preferences are thus crucial in determining the stringency of environmental regulation. However, it is important to recognize that their preferences as voters are an important factor determining environmental and trade policy.Ĭonsider a voting system where a candidate running for political office is elected, or an environmental ballot initiative is approved by majority rule. The reason for ignoring similar consumer groups was that they typically face a more severe collective action problem in organizing as a lobby. Up to this point, the focus has been on the role of lobby groups from dirty producers, in determining environmental policy in an open economy. ![]() Kellenberg, in Encyclopedia of Energy, Natural Resource, and Environmental Economics, 2013 The Role of Voter Preferences on Environmental Policy in an Open Economy ![]()
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