Dynamics of Environmental Regulation and Voters' Biased Beliefs: A Political Economy Approach

Louis Jaeck, Gilbert Bougi

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

This paper develops a political economy model which determines the conditions of cycles in environmental regulation. It analyzes the impact of both interest groups and voters who have biased political beliefs. Such biased beliefs are the result of the influence of activist interest groups that strategically use the beliefs formation process among ignorant voters (cascade effect). The cascade effect biases the perception of the efficiency of regulatory instruments and affects the behavior of the politician. Our model seems particularly relevant to explain the evolution of environmental policies, which are characterized by scientific controversies, such as climate change policies. The high media coverage of climate issues, as well as persistent debates among experts, is a favorable context for the influence of activist interest groups that use the public's cognitive biases.

Original languageEnglish
Pages (from-to)399-409
Number of pages11
JournalAtlantic Economic Journal
Volume38
Issue number4
DOIs
Publication statusPublished - Dec 2010
Externally publishedYes

Keywords

  • Collective beliefs
  • Environmental regulation
  • Political economy

ASJC Scopus subject areas

  • General Economics,Econometrics and Finance

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