Environmental degradation as an outcome of democracy deficits

The study examines the influence of power inequality on the environmental quality. Taking the existing differences in the treatment of the natural environment in democratically and autocratically ruled countries as the starting-point, the work analyzes the way in which a democratization, synonymous with a power-inequality reduction, can lead to preservation or even improvement of the environmental quality in an interplay with wealth, income and resource inequalities. An assumed connection between fiscal and environmental policies plays a central role in the examination: When the abatement financing is positively related to the degree of redistribution, then a democratization will tend to contribute to less environmental degradation. This result is obtained both in the short and the long run with the aid of two theoretical models having an overlapping-generations structure and including pollution. Moreover, the steadystate adjustment in the dynamic model depends on the initial wealth distribution. The subsequent empirical evaluation confirms the negative relationship between the degree of redistribution and the emission levels of four different air pollutants. Additional aspects of the work pertain to the impact of organized special interests, electoral rules and systems, as well as elements of direct democracy on the shape and outcomes of environmental policies.