Decentralization and the environment: Cross-country evidence

Environment policies have evolved over the years around the world, in part due to growing awareness among the population of the challenges posed by climate change. The decentralization of policymaking, administrative and political responsibilities to the subnational levels of administration may also have played a part to the extent that it creates room for bottom-up policy experimentation and citizen participation in policy design, including in areas related to the environment, that may influence people’s preferences and attitudes and ultimately government policy. To shed light on these linkages, this paper provides cross-country empirical evidence based on national accounts data that decentralization is associated with higher government spending on environment-related programmes, as well as higher collection of environmental taxes in the advanced economies, controlling for conventional public finance covariates.