Environmental pollution and fiscal decentralization. On the role of institutions.
Previous research in the field of Environmental Federalism has not reached an agreement on whether fiscal decentralization leads to an increase in environmental pollution, i.e. a race to the bottom, or decrease in it, i.e. a a race to the top. Farzanegan and Mennel (2012) point out that this discrepancy may be due to institutions. Employing the OLS estimator, they find that fiscal decentralization