Chortareas, Georgios E. Logothetis, Vassilis E. Papandreou, Andreas A.
Year of Publication:
Cardiff Economics Working Papers No. E2018/9
We investigate how public opinion along with the electoral process affect the strength of environmental fiscal policies in the European Union (EU). Our analysis accounts for a set of economic, institutional, and political factors that can affect environmental taxes and expenditures. We pursue a dynamic panel data analysis covering 27 EU countries using public opinion data. We produce evidence showing that public concern for the environment, as gauged by opinion surveys, positively affects environmental protection expenditures, while elections negatively affect environmental tax revenues and environmental protection expenditures shrink in the aftermath of elections. We do not find evidence of partisan effects. The effect of public opinion and elections on environment-related fiscal decisions depends on the degree of integration with the global economy as well as several institutional factors including the level of corruption and the soundness of the rule of law. We also document that the results are impervious to a wide set of robustness tests.
Environmental Protection Taxes and Expenditures Public Opinion European Union Panel Data