Public and private environmental spending: a political economy approach

Abstract

This study examines the level of public investment in environmental quality when there are private alternatives. Public investment is chosen by majority voting. When consumption and environmental quality are complementary, one may observe a solution of the type “ends against the middle.” The setting is intertemporal. Parents are altruistic and they can express their altruism by leaving financial bequests, but also by voting and contributing to the environmental quality their children will enjoy.