Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147381
Authors: 
Doyle, Matthew
Di Maria, Corrado
Lange, Ian A.
Lazarova, Emiliya
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6127
Abstract: 
Researchers have utilized the fact that many states have term limits (as opposed to being eligible for re-election) for governors to determine how changes in electoral incentives alter state regulatory agency behavior. This paper asks whether these impacts spill over into private sector decision-making. Using data from gubernatorial elections in the U.S., we find strong evidence that power plants spend less in water pollution abatement if the governor of the state where the plant is located is a term-limited democrat. We show that this evidence is consistent with compliance cost minimization by power plants reacting to changes in the regulatory enforcement. Finally, we show that the decrease in spending has environmental impacts as it leads to increased pollution.
Subjects: 
political economy
electoral incentives
term limits
environmental policy
pollution abatement
compliance costs
power plants
water pollution
regression discontinuity
JEL: 
H32
H76
Q25
Q53
Q58
Document Type: 
Working Paper

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