Decentralization and the Political Economy of Water Pollution: Evidence from the Re-drawing of County Borders in Brazil
نویسندگان
چکیده
Using panel data on water pollution in Brazilian rivers, we study inter-jurisdictional externalities when more jurisdictions start managing the same river segment. Counties split at each election cycle, which change the locations of borders. This allow us to identify the effects of border crossings and the spatial pattern of pollution as rivers approach borders, controlling for fixed effects and trends specific to each location. The theory of externalities predicts that pollution should increase at an increasing rate as the river approaches the downstream exit border, that there should be a structural break in the slope of the pollution function at the border, and that larger number of managing jurisdictions should exacerbate pollution externalities. We find support for all four predictions in the data. We also show that it is difficult to reconcile other theories and mechanisms with the four pieces of congruent evidence we report. These results suggest that decentralization policies promoted by governments and international organizations come at an efficiency cost when local jurisdictions provide public services with inter-jurisdictional spillovers. We provide this evidence in an important setting: over one billion people in the world lack sufficient potable water, and 80 percent of sewage is dumped into surface water untreated. JEL Codes: Q56, D62, H23, Q53, O12
منابع مشابه
“Decentralization and Pollution Spillovers: Evidence from the Re-drawing of County Borders in Brazil” A History of County Splits in Brazil
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