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Hilary Sigman
NBER Working Paper No. 13098
Issued in May 2007
NBER Program(s): PE
EEE
---- Abstract -----
Many arguments about decentralization in public goods provision have testable implications for the relationship between decentralization and the level and spatial variability of public goods. This paper explores the empirical relationship between decentralization and environmental public good, water quality in rivers at monitoring stations around the world. It examines pollution levels and spatial variability of pollution within a country for both a local and a regional pollutant. The results suggest higher pollution levels with greater decentralization when fixed effects are included; the evidence is strongest for the regional pollutant, where it might result from interjurisdictional free riding. Federalism is associated with greater spatial variability in pollution within a country, consistent with the traditional view that decentralization allows policies more tailored to local conditions.
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