## Trade Integration and Political Turbulence: Environmental Policy Consequences

_IMF Working Papers, October 1, 2001_

## Source details

**Canonical URL:** [Trade Integration and Political Turbulence: Environmental Policy Consequences](https://www.imf.org/en/publications/wp/issues/2016/12/30/trade-integration-and-political-turbulence-environmental-policy-consequences-15373)

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## Bibliographic details
- Authors: Muthukumara Mani, Per G. Fredriksson
- Published: October 1, 2001
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451856965.001

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### Summary and theoretical framework
- Research question: effect of economic integration on environmental policy, with attention to joint impact of trade openness and political uncertainty.
- Core theoretical predictions:
  - "The effect of trade integreation on the environment is conditional on the degree of political uncertainty."
  - "Trade integration raises the stringency of environmental policies, but the effect is reduced when the degree of political uncertainty is great."
  - "Political uncertainty has a positive effect on environmental policy as it reduces lobbying efforts."
- Model features and terminology preserved from source: trade openness, political uncertainty, lobbying, lobby group, incumbent government, government turnover, utility function, policy choice, producer lobby.

### Empirical approach and findings
- Data: "a unique data set of primarily developing countries."
- Main empirical result: "The empirical findings support the theory and are robust under alterntive specifications."
- Robustness: findings remain under alternative specifications (as stated in source).

### Policy implications and interpretation
- Trade liberalization tends to increase environmental-policy stringency, but:
  - The strengthening effect of trade on environmental policy is attenuated when political uncertainty is high.
  - Political instability can reduce lobbying pressure, which may paradoxically improve environmental policy outcomes.
- Relevant policy considerations:
  - Account for political uncertainty when assessing environmental impacts of trade integration.
  - Consider interactions between trade policy, political stability, and domestic lobbying dynamics when designing environmental regulations.

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## Content in this bundle

- **125935**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/trade-integration-and-political-turbulence-environmental-policy-consequences-15373_