Is Inequality Harmful for the Environment in a Growing Economy?

Hubert Kempf (1) , Stéphane Rossignol (1)

1 CES - Centre d'économie de la Sorbonne

In this paper, we investigate the relationship between inequality and the environment in a growing economy from a political-economy perspective. We consider an endogenous growth economy, where growth generates
pollution and a deterioration of the environment. Public
expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is made in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment: the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth.

Mots clés: Political economy; environment; inequality; growth and environment

Domaines: Economies et finances

Hubert Kempf, Stéphane Rossignol. Is Inequality Harmful for the Environment in a Growing Economy?. Economics and Politics, 2007, 19 (1), pp.53-71. ⟨10.1111/j.1468-0343.2007.00302.x⟩. ⟨halshs-00177252⟩