Search results

Whether a country is able effectively to address collective action problems is a critical test of its ability to fulfill the demands of its citizens to their satisfaction. We study one particularly important collective action problem: the environment. Using a large panel dataset covering 25 years for some countries, we find that, overall, citizens of European countries are more satisfied with the way democracy works in their country if (a) more environmental policies are in place and if (b) expenditures on the environment are higher, but environmental taxes are lower. The relation between environmental policy and life satisfaction is not as pronounced. The evidence for the effect of environmental quality on both satisfaction with democracy and life satisfaction is not very clear, although we find evidence that citizens value personal mobility (in terms of having a car) highly, but view the presence of trucks as unpleasant. We also document that parents, younger citizens, and those with high levels of educational attainment tend to care more about environmental issues than do non-parents, older citizens, and those with fewer years of schooling. Adapted from the source document.

Using modern methods for analyzing multi-level data, we find that, by and large, citizens of OECD countries are more satisfied with the way democracy works in their country if more environmental policies are in place and if environmental quality is higher. We also document that parents care about carbon dioxide emissions more than non-parents and that those with a high willingness to pay for environmental quality deplore intervention through government policies.

Economists have expended considerable effort to develop economically meaningful definitions of the somewhat elusive concept of "sustainability." We relate such a definition of sustainability to well known concepts from neoclassical economics, in particular, potential Pareto improvements (in the Kaldor-Hicks sense) and inter-personal compensation. In the inter-temporal realm, we find that dynamic efficiency is a necessary but not sufficient condition for a notion of sustainability that has normative standing as a goal for public policy. We define sustainability as dynamic efficiency plus intergenerational equity. Further, we argue that it is not unreasonable for economists to focus on the efficiency element, leaving equity considerations to the political process. The analogy to the relationship between potential Pareto improvements and(intragenerational) transfers can facilitate discussions about sustainability, both within the economics community and as part of an interdisciplinary discourse, and makes the basic concepts easier to operationalize.