Bulletin n. 2/2008
September 2008
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Naoto Aoyama, Silva Emilson C. D.
    Correlated Pollutants, Interregional Redistribution and Labor Attachment in a Federation
    in Environmental & Resource Economics , Volume 41, Number 1, September ,  2008 ,  111-131
    We examine the efficiency of federal policies in a federation characterized by decentralized leadership, imperfect labor mobility and transboundary pollution. Selfish regional governments regulate correlated pollutant emissions by choosing pollution tax and abatement levels in anticipation of the center’s redistributive policy. The center’s objective function obeys a proportional equity principle, which implies that its choice of interregional transfer satisfies the equalization of weighted regional welfare levels. Regional and central governments make their choices subject to migration incentives. We show that the subgame perfect equilibrium for the sequential game played by regional and central governments yields socially optimal policies.
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