Boyce Inequality

8/19/2019 Boyce Inequality

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E C O L O G I C L

E C O N O M I C S

ELSEVIER

Ecological Economics 11 (1994) 169-178

n e q u a l i ty a s a c a u s e o f e n v i r o n m e n t a l d e g r a d a t i o n

James K Boyce

Department of Economics Uniuersity of Massachusetts Amherst MA 01003 USA

Received 15 March 1993; accepted 15 February 1994

bs trac t

T h i s p a p e r a d v a n c e s t w o h y p o t h e s e s . F i r s t, t h e e x t e n t o f a n e n v i r o n m e n t a l l y d e g r a d i n g e c o n o m i c a ct iv i ty is a

f u n c t i o n o f t h e b a l a n c e o f p o w e r b e t w e e n t h e w i n n e r s , w h o d e r i v e n e t b e n e f i t s f r o m t h e a c ti v it y , a n d t h e l o s e rs , w h o

b e a r n e t c o s t s. S e c o n d , g r e a t e r i n e q u a l i ti e s o f p o w e r a n d w e a l t h l e a d , al l el s e e q u a l, t o m o r e e n v i r o n m e n t a l

d e g r a d a t i o n .

Keywords E n v i r o n m e n t a l d e g r a d a t i o n ; I n e q u a l i t y

W e c a n ' t s e e h o w t h e a u t h o r i t ie s c a n s ay t h e y c o s t s - t h e y w o u l d n o t m a t t e r in t e r m s o f h u m a n

d e f e n d t h e e c o l o g i c a l s y s t e m , w h i l e a t t h e s a m e w e l l - b e i n g .

t i m e d e p l o y i n g p o l ic e t o p r o t e c t t h o s e w h o a r e I n a n a l y z i n g a n e n v i r o n m e n t a l l y d e g r a d i n g

d e s t r o y i n g t h e f o r e s t . e c o n o m i c a c ti vi ty , t h e r e f o r e , w e c a n p o s e t h r e e

B r a z i li a n r u b b e r t a p p e r s u n i o n l e a d e r C h i c o b a s ic q u e s t i o n s :

M e n d e s ( 1 9 8 9, p . 6 0 ), s h o r t l y b e f o r e h i s a s s a s - o W h o a r e t h e w i n n e r s ?

s i n a t i o n , o W h o a r e t h e l o s e r s ?

o W h y a r e t h e w i n n e r s a b l e t o i m p o s e c o s t s o n

t h e l o s e r s ?

T h e l a s t q u e s t i o n h a s t h r e e p o s s i b l e a n s w e r s .

O n e i s t h a t t h e l o s e r s d o n o t y e t e x i s t . T h e y

1 . I n t r o d u c t i o n b e l o n g t o f u t u r e g e n e r a t i o n s , a n d s o a r e n o t h e r e

t o d e f e n d t h e m s e l v e s . T h e s e c o n d p o s s i b il i ty is

E c o n o m i c a c ti v it ie s t h a t d e g r a d e t h e e n v i r o n -

m e n t g e n e r a l l y y i e ld w i n n e r s a n d l o se r s. W i t h o u t

w i n n e r s - p e o p l e w h o d e r i v e n e t b e n e f it f r o m t h e

a c ti v it y , o r a t l e a s t t h i n k t h a t t h e y d o - t h e

I do not consider here the relative merits of the biocentric

e n v i r o n m e n t a l l y d e g r a d i n g a c t i v i t i e s w o u l d

n ot position which accords indepe ndent ethical value to the well-

o c c u r . W i t h o u t l o s e rs - p e o p l e w h o b e a r n e t

being of animals,

plants, or ecosystems.

0921-8000/94 / 07.00 © 1994 Elsevier Science B.V. All rights reserved

SSDI 0921-8009(94)00011-J


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170 J.K. Boyce / Eco log ica l Econ omics 11 1994) 169 -17 8

Winners Losers

~ m a r g i n a l m a r g i n a l

0 Ds DSO

p

Level f environmental egradation

F ig . 1 . D e t e r m i n a t i o n o f t h e l ev e l o f e n v i r o n m e n t a l d e g r a d a t i o n . D S = L e v e l p r e s c r i b e d b y c o s t - b e n e f i t a n a l y s is ( s o c ia l ly

e f f i c i e n t ) . D s o R = L e v e l u n d e r p o w e r - w e i g h t e d s o c i a l d e c i s i o n ru l e . D p = L e v e l u n d e r f r e e m a r k e t ( p r i v a te l y e f f i c i e n t ) .

t h a t t h e l o s e rs a l r e a d y e x is t, b u t t h e y d o n o t k n o w I n th i s e s s a y I p r o p o s e a p o l i t i c a l - e c o n o m y

i t. T h e y l a c k i n f o r m a t i o n a b o u t t h e c o s ts o f e n v i- f r a m e w o r k f o r t h e a n a ly s is o f e n v i r o n m e n t a l

r o n m e n t a l d e g r a d a t i o n . T h e t h i r d p o s s ib i li ty is d e g r a d a t i o n in w h i c h t h e i d e n t i ti e s o f w i n n e r s

t h a t t h e l o s e r s e x i st a n d k n o w it, b u t t h e y l a c k t h e a n d l o s e r s m a t t e r . I h y p o t h e s i z e t h a t i f t h e w i n -

p o w e r t o p r e v e n t t h e w i n n e r s f r o m i m p o s i n g c o s ts n e r s a r e r e l a t iv e l y p o w e r f u l , a n d t h e lo s e r s r e l a -

o n t h e m . T h i s e s s a y a d d r e s s e s m a i n l y , t h o u g h n o t t iv e l y p o w e r l e s s , m o r e e n v i r o n m e n t a l d e g r a d a t i o n

e x c l u s iv e l y , t h e l a s t c a s e . 2 w i ll o c c u r t h a n i n t h e r e v e r s e s i t u a t i o n . T h e s e

T r a d i t i o n a l m i c r o e c o n o m i c a n a ly s is t r e a t s t h e o u t c o m e s a r e g u i d e d b y w h a t I t e r m a power

e x t e r n a l c o s ts o f e n v i r o n m e n t a l d e g r a d a t i o n a s a n weighted social decision rule. F u r t h e r m o r e , I h y -

i m p e r s o n a l b y - p r o d u c t o f e c o n o m i c a c ti v it y . T h e p o t h e s i z e t h a t , a ll e l s e e q u a l , g r e a t e r i n e q u a l i ti e s

i d e n ti ti e s o f t h o s e w h o p r o d u c e n e g a t iv e e x t e rn a l - o f p o w e r a n d w e a l t h l e a d t o m o r e e n v i r o n m e n t a l

i ti e s, a n d o f th o s e o n t h e r e c e i v i n g e n d , a r e d e g r a d a t i o n , f o r t h r e e r e a s o n s : f ir s t, v i a a s y m m e -

i r r e l e v a n t t o b o t h t h e d i a g n o s is o f t h e p r o b l e m t r ie s i n t h e p o w e r - w e i g h t e d s o c ia l d e c i s io n r u l e ;

a n d t h e p r e s c r i p t i o n o f a s o l u ti o n . O n e n e e d n o t s e c o n d , v i a i m p a c t s o n v a l u a t i o n s o f t h e c o s ts a n d

a s k who w i n s a n d lo s e s, b u t o n l y w h e t h e r t h e b e n e f i t s o f e n v i r o n m e n t a l l y d e g r a d i n g a c t iv i ti e s;

m a r g i n a l s o c ia l c o s t o f th e a c t iv i ty e x c e e d s i ts a n d t h i rd , v i a i m p a c t s o n t h e r a t e o f t i m e p r e f e r -

m a r g i n a l s o c ia l b e n e f i t . I f s o , t h e u s u a l r e m e d i e s e n c e a p p l i e d t o t h e e n v i r o n m e n t .

t a x es , r e g u l a t i o n , o r m a r k e t c r e a t i o n - a r e

p r o f f e r e d . W h e t h e r t h e s e r e m e d i e s a r e i n f a c t

i m p l e m e n t e d i s t h e p r o v i n c e o f p o l it i c a l s c i e n c e , 2 . T h e p o w e r - w e i g h t e d

s o c i a l d e c i s i o n

r u l e

o r p e r h a p s s o c i o l o g y .

C o s t - b e n e f i t a n a l y s i s p r e s c r i b e s a p r e c i s e r u l e

t o g o v e r n s o c i a l d e c i s i o n s : a n e n v i r o n m e n t a l l y

2 F o r i n te r e st in g t r e a tm e n t s o f t h e f ir st , s e e M a r t i n ez - A l ie r d e g r a d i n g a c t i v i t y s h o u l d b e p u r s u e d a s l o n g a s

(1987,

pp. 156-171 and

N o r g a a r d

and Howarth

(1991).

i ts m a r g i n a l n e t i m p a c t o n s o c i e t y i s p o s i t iv e . T h e


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J .K. Boyce /Eco log ica l Economics 11 1994) 169-178

171

l a t t e r i s c a l c u l a t e d , i n t h e o r y , a s t h e s u m o f m e n t a l d e g r a d a t i o n t o a l e ve l b e l o w D e T h e r e i s ,

m a r g i n a l b e n e f i t s a n d c o s ts t o e v e r y o n e a f f e c t e d , h o w e v e r , n o g u a r a n t e e t h a t t h e r e s u l t w i ll b e

D s

i n c l u d i n g t h e e x t e r n a l c o s t s o f p o l l u t i o n a n d r e - T h e r e a s o n a d v a n c e d b y C o a s e ( 1 9 60 ) is t h a t

s o u r c e d e p l e t i o n . In p r a c t ic e th i s c a l c u l a t i o n is t r a n s a c t i o n c o s ts o f t e n p r e v e n t t h e a t t a i n m e n t o f

o f t e n q u i t e d i f f i c u lt , b u t m y c o n c e r n h e r e is n o t t h e s oc i a l o p t i m u m . I t i s n o t c o s t l e s s, f o r e x a m -

p r a c t i c a l d i f fi c u l t ie s , b u t t h e t h e o r y it s e lf . It is p l e , f o r t h e l o s e r s t o b a r g a i n w i t h t h e w i n n e r s o r

p o s s ib l e , i n d e e d l ik e ly , t h a t n o t e v e r y o n e a f f e c t e d t o l o b b y t h e g o v e r n m e n t .

b y t h e a c t iv i ty w i ll d e r i v e a n e t b e n e f i t . S o m e w i ll H e r e I w i s h t o su g g e s t a f u r t h e r r e a s o n f o r

b e a r n e t c o s ts . B u t a s l o n g a s t h e w i n n e r s c o u l d i n f a i lu r e s t o a c h i e v e t h e c o s t - b e n e f i t o p t i m u m :

t h e o r y c o m p e n s a t e th e l o s e rs , a n d s ti ll w i n , t h e R e a l - w o r l d o u t c o m e s a r e s h a p e d b y t h e r e l a t iv e

a c t iv i ty is d e e m e d s o c ia l ly e f f i c i e n t a n d p a s s e s p o w e r o f t h e w i n n e r s a n d l o se r s . C o n s i d e r t w o

t h e c o s t - b e n e f i t t e st . i n d iv i d u al s , A a n d B , w h o w o r k i n t h e s a m e

C o n t r a s t t h is p r e s c r i p t i o n t o w h a t h a p p e n s i n a o f f ic e . A e n j o y s c i g ar s , w h i l e B a b h o r s s m o k e .

t h e o r e t i c a l la i s s e z - f a i r e w o r l d . T h e c o s t s t o t h e H o w m u c h , i f a t a ll , w i l l A s m o k e c ig a r s i n t h e

l o s e rs a r e s im p l y i g n o r e d b y t h e w i n n e r s , w h o o f f i c e ? I f A h a p p e n s t o b e t h e b o s s, a n d B a

p u r s u e t h e a c t i v it y a s l o n g a s i t r e m a i n s p r i v a t e l y s e c r e t a r y , t h e a n s w e r is l i k e ly t o d i f f e r f r o m t h e

b e n e f i c i a l f o r t h e m to d o s o. H e n c e th e a c t iv i ty is r e v e r s e s i tu a t i o n . M o r e g e n e r a l l y , I h y p o t h e s i z e

p u r s u e d e v e n w h e n i ts n e t s o c ia l i m p a c t is n e g a - t h a t A ' s a b i l it y t o i m p o s e e x t e r n a l c o s ts o n B

t iv e . d e p e n d s o n A ' s p o we r r e l a t i v e t o B .

F i g. 1 d e p i c t s t h e s e t w o t h e o r e t i c a l c a s e s. T h e I n C o a s i a n te r m s , w e c o u l d d e f i n e p o w e r a s

d o w n w a r d - s l o p i n g l in e r e p r e s e n t s t h e m a r g i n a l t h e a b il it y t o b e a r t r a n s a c t i o n c o s ts . I n t h e a b o v e

b e n e f i t t o t h e w i n n e r s , t h e u p w a r d - s l o p i n g l i n e e x a m p l e , t h e b o s s c o u l d b e s a id t o b e b e t t e r a b l e

t h e m a r g i n a l c o s t t o t h e l o s e rs . T h e b e n e f i t c u r v e t o b e a r t h e t r a n s a c t i o n c o s t s o f s e t t in g o f f i c e

s l o p e s d o w n w a r d d u e t o d i m i n i s h in g w e l f a r e g a i n s s m o k i n g p o l ic y . S im i l ar ly , w e c a n p r e d i c t t h a t

( t h e s u m o f p r o d u c e r s ' s u r p l u s a n d c o n s u m e r s ' w a s t e - d i s p o s a l f a c i l it i e s w i ll b e s i t e d i n t h e l e a s t

s u r p l u s ) f r o m a d d i t i o n a l u n i t s o f t h e e n v i r o n m e n - p o w e r f u l c o m m u n i t i e s , o r i n C o a s i a n te r m s , c o m -

t a ll y d e g r a d i n g a c ti v it y . T h e c o s t c u r v e sl o p e s m u n i t i e s w h o s e r e s i d e n t s a r e l e a s t a b l e t o b e a r

u p w a r d d u e t o t h e ri si n g m a r g i n a l i m p a c t o f t h e t r a n s a c t i o n c o s t o f r e j e c t in g s u c h f a c il it ie s .

a d d i t i o n a l u n i t s o f e n v i r o n m e n t a l d e g r a d a t i o n . T h e f a c t t h a t h a z a r d o u s - w a s t e s i te s i n t h e U n i t e d

F o r e x a m p l e , t h e e n v i r o n m e n t a l c o s t o f c l e a r i n g S t a t e s a r e d i s p r o p o r t i o n a t e l y l o c a t e d w h e r e r a c i a l

t h e l a st 1 0 00 a c r e s o f a 1 0 0 0 0 - h e c t a r e r a i n f o r e s t m i n o r i t i e s li ve ( C o m m i s s io n f o r R a c i a l J u s t ic e ,

e x c e e d s t h a t o f c l e a r i n g t h e f ir s t 1 00 0. T h e so - 1 9 8 7) t h u s t e ll s u s s o m e t h i n g a b o u t t h e r e l a t i o n -

c i a ll y e f f i c i e n t l e v el o f e n v i r o n m e n t a l d e g r a d a - s h i p b e t w e e n r a c e a n d p o w e r i n t h a t c o u n t r y .

t i o n p r e s c r i b e d b y c o s t - b e n e f i t a n a l y s i s i s

D s

3 R e l a t i v e p o w e r is a f u n c t i o n o f t h r e e f a c t o r s :

T h e l a is s e z - f a ir e le v e l p r i v a t e ly c h o s e n b y t h e ( a ) a v e c t o r o f p o w e r - r e l e v a n t i n d iv i d u a l c h a r a c -

w i n n e r s i s D e t e r i s ti c s s u c h a s w e a l t h , g e n d e r , e t h n i c i t y , a n d

R e a l - w o r l d o u t c o m e s o f t e n d o n o t c o n f o r m to c la s s; ( b ) t h e n u m b e r s o f i n d iv i d u a ls i n v o lv e d ; a n d

t h e s e i d e a l t y p e s. W i n n e r s a r e c o n s t r a i n e d b y ( c ) t h e p o l it ic a l f r a m e w o r k i n w h i c h t h e s e v a r i-

r e a c t i o n s o f t h e l o se r s i n t h e f o r m o f i n f o r m a l a b l e s a r e m a p p e d t o p o w e r .

s a n c t i o n s, p r i v a t e b a r g a i n i n g , o r p r e s s u r e f o r g o v - I n a n y g i v e n p o l i ti c a l f r a m e w o r k , f o r e x a m p l e ,

e r n m e n t i n t e r v e n t i o n . T h e s e c a n l i m it e n v i r o n - r i c h e r i n d iv i d u a ls a r e l ik e l y t o w i e l d m o r e p o w e r

t h a n p o o r e r i n d iv i d u a ls . M o n e y s p e a k s n o t o n ly

i n t h e c o n v e n t i o n a l m a r k e t s f o r g o o d s a n d s e r -

v i c e s , b u t a ls o i n t h e m a r k e t s f o r p o l i t i c a l i n f l u -

e n c e ( F e r g u s o n , 1 9 83 ). S im i l ar ly , e n v i r o n m e n t - r e -

3 1 p l a c e e f f i c ie n t i n i n v e r t e d c o m m a s b e c a u s e t h e v a l u a -

l a t e d p r o b l e m s t h a t e x c lu s iv e l y a f f li c t w o m e n ,

t i o n s o f b e n e f i t s a n d c o s t s b y w h i c h t h i s t e r m i s d e f i n e d v a r y

w i t h t h e d i s t ri b u t i o n o f e n d o w m e n t s , p r e f e r e n c e s , a n d t e c h - s u c h a s b r e a s t c a n c e r , m a y r e c e i v e l e s s r e m e d i a l

nology , a s d is cuss ed below, a t t e n t i o n t ha n p r ob l em s t ha t a f f l i c t m e n . T he


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172 J.K.

Boyce / Ecological Economics 11 1994) 169-178

r e l e v a n c e o f c l as s a n d e t h n i c i t y h a s a l r e a d y b e e n I n th e s a m e w a y th a t t h e c h o i c e - t h e o r e t i c

s u g g e s t e d , m o d e l o f m i c r o e c o n o m i c t h e o r y i n f e r s u t il it y f r o m

T h e e x t e n t t o w h i c h d i f f e r e n c e s i n w e a l t h a n d t h e r e v e a l e d p r e f e r e n c e s o f t h e i n d iv i d u a l, w e c a n

o t h e r i n d iv i d u a l c h a r a c t e r i s t ic s t r a n s l a t e i n t o d i f- i n f e r p o w e r f r o m t h e r e v e a l e d p r e f e r e n c e s o f

f e r e n c e s i n p o w e r d e p e n d s o n t h e p o l it ic a l f r a m e - s o c ie t y . I f , f o r e x a m p l e , th e a c t u a l le v e l o f e n v i-

w o r k . F o r e x a m p l e , p o w e r a n d w e a l t h a r e l ik e l y r o n m e n t a l d e g r a d a t i o n is D s o n i n F i g . 1 , w he re

t o b e p o s i ti v e ly c o r r e l a t e d , b u t t h e s t r e n g t h o f t h e m a r g i n a l c o s t t o t h e l o s e r s i s f o u r t i m e s t h e

t h a t c o r r e l a t i o n m a y v a r y c o n s i d e r a b l y . P o w e r m a r g i n a l b e n e f i t t o t h e w i n n e r s , w e c a n c o n c l u d e

m a y b e m o r e h i gh ly c o n c e n t r a t e d t h a n w e a l th , o r t h a t th e w i n n e r s a re f o u r ti m e s m o r e p o w e r f u l

l e ss s o, d e p e n d i n g o n t h e p o l it i ca l f r a m e w o r k , t h a n t h e l o s e rs .

T h e i m p o r t a n c e o f t h i s f r a m e w o r k w a s v i v id l y T h i s d e f i n i t i o n , l i k e t h a t o f u t i li t y , i s c i r c u l a r :

i l lu s t r a te d i n t h e f o r m e r S o v i e t U n i o n , w h e r e a p o w e r b o t h e x p l a in s a n d is r e v e a l e d b y c h o i c e .

h i g h ly i n e q u i t a b l e d i s t r ib u t i o n o f p o w e r p r e v a i l e d B u t c ir c u l a r it y n e e d n o t m e a n e m p t i n e s s . L i k e

d e s p i t e a r e l a ti v e l y e g a l i t a r i a n d i s t r ib u t i o n o f t h e u t i l i ty - m a x i m i z a t i o n m o d e l o f i n d i v id u a l

w e a l t h . T h e r e s u l t, a s o n e w o u l d p r e d i c t u n d e r c h o i c e , t h e p o w e r - w e i g h t e d m o d e l o f s o c ia l c h o i c e

t h e p o w e r - w e i g h t e d s o c ia l d e c i s i o n r u l e , w a s l a r g e y i e ld s t e s t a b l e p r e d i c t i o n s . It p r e d i c t s t h a t so c i a l

e n v i r o n m e n t a l c o s t s i m p o s e d a b o v e a ll o n p e o p l e c h o i c e s g o v e r n i n g e n v i r o n m e n t a l d e g r a d a t i o n w i ll

w i t h l it tl e p o w e r . 4 c o n s i s t e n t ly f a v o r s o m e p e o p l e o v e r o t h e r s , a n d

I f, a s is f r e q u e n t l y t h e c a se , t h e w i n n e r s a n d t h a t t h is p a t t e r n w i ll c o r r e l a t e w i t h o t h e r p o w e r -

l o s e r s a r e g r o u p s r a t h e r t h a n s i n g l e i n d i v i d u a l s , r e l a t e d v a r i a b l e s . T h i s h y p o t h e s i s a s t o t h e i d e n t i -

t h e i r r e l a t iv e p o w e r a l so d e p e n d s o n t h e n u m b e r s t ie s o f w i n n e r s a n d l o se r s - t h a t is , t h e d i r e c t i o n

i n v o lv e d . G r o u p p o w e r m a y b e si m p l y t h e s u m o f o f n e g a t i v e e x t e r n a l i ti e s - f o r m s o n e e l e m e n t i n a

t h e i n d iv i d u a l p o w e r o f it s m e m b e r s , b u t t h i s r e s e a r c h a g e n d a i n t h e p o l it i ca l e c o n o m y o f e n v i-

d e p e n d s o n t h e i n s t it u t io n a l f r a m e w o r k f o r c o l- r o n m e n t a l d e g r a d a t i o n .

l e c t i v e a c t i o n . D e p a r t u r e s f r o m s c a l e - n e u t r a l i ty

a r e c o n c e i v a b l e i n e i t h e r d i r e c t i o n . I f , a s O l s o n

1 9 6 5 ) a n d o t h e r s h a v e a r g u e d , s m a l l g r o u p s o r g a - 3 . I n e q u a l i t y a n d p o w e r - w e i g h t e d s o c i al d e c i s io n s

n i z e m o r e r e a d il y t h a n b i g o n e s, l a r g e n u m b e r s

a r e a l ia b il it y. O n th e o t h e r h a n d , s o m e i n s ti tu - A t f i rs t g l a n c e , t h e a g g r e g a t e e f f e c t o f p o w e r

t i o n a l f ra m e w o r k s - i n c l u d in g s i m p l e m a j o r i t y i n e q u a l i ty o n t h e l e v e l o f e n v i r o n m e n t a l d e g r a d a -

r u l e - y i el d s t r e n g th t h r o u g h n u m b e r s , t io n m a y s e e m a m b i g u o u s. O n t h e o n e h a n d ,

R e t u r n i n g t o F ig . 1 , w e c a n d e s c r i b e r e a l - w o r l d w h e n t h e w i n n e r s a r e m o r e p o w e r f u l t h a n t h e

o u t c o m e s a s t h e r e s u l t o f a p o w e r - w e i g h t e d s o c i a l l o s e r s t h e p o w e r - w e i g h t e d s o c i a l d e c i s i o n r u l e

d e c i s i o n r u l e . W h e n t h e lo s e r s a r e l e ss p o w e r f u l p r e d i c t s t h a t g r e a t e r i n e q u a l i t y w i ll l e a d t o m o r e

t h a n t h e w i n n e r s , e n v i r o n m e n t a l d e g r a d a t i o n e x - e n v i r o n m e n t a l d e g r a d a t i o n , p u s h in g t h e o u t c o m e

c e e d s . D s ; w h e n t h e lo s e rs a r e m o r e p o w e r f u l f u r t h e r t o t h e r ig h t o f D s i n F i g . 1 - i n t he m os t

t h a n t h e w i n n e r s , i t i s l e s s t h a n D s . I n t h i s e x t r e m e c a s e , t o D e .

f r a m e w o r k , t h e t h e o r e t i c a l o u t c o m e s u n d e r O n t h e o t h e r h a n d , w h e n t h e l o se r s a r e m o r e

c o s t - b e n e f i t a n a ly s is a n d l a i ss e z - f a ir e r e p r e s e n t p o w e r f u l t h a n t h e w i n n e r s , g r e a t e r p o w e r i n -

s p e c ia l c a s es : t h e f ir s t c o r r e s p o n d s t o a n e q u a l e q u a l i t y r e d u c e s t h e l e v el o f e n v i r o n m e n t a l

d i s t r ib u t i o n o f p o w e r b e t w e e n w i n n e r s a n d l o se r s ; d e g r a d a t i o n , p u s h i n g i t f u r t h e r t o t h e l e f t o f D s ,

t h e s e c o n d t o a s it u a t i o n i n w h i c h t h e l o s e r s a n d i n t h e m o s t e x t r e m e c a s e p r e v e n t i n g i t a l to -

e x e r c i s e n o p o w e r w h a t s o e v e r , g e t h e r . I n s o c ia l c o s t - b e n e f i t t e r m s , t h e r e s u l t is

a s u b - o p t i m a l l e v e l o f e n v i r o n m e n t a l d e g r a d a t i o n .

A s a n e x a m p l e , c o n s i d e r t h e f o r c i b l e e v ic t i o n o f

s l u m d w e l l e r s w h i c h I w i t n e s s e d i n D h a k a , t h e

4 For an indictment of the environmental degradation un-

der the Soviet power s tructure , see Komarov 1978) . See a l s o ca pi ta l of Ba ng lad es h , in 1975. At t ha t t im e sh an -

Pryde 1991) and Peterson

1993) .

t y to w n s w e r e b u l l d o z e d a n d t h e i r r e s i d e n t s l i te r -


5/10

J.K. Boyce /Ecological Economics 11 1994) 169-178 173

a ll y t h r o w n i n to m i l i t a ry t r u c k s a n d d e p o s i t e d a t d i s c h a r g e d i n to t h e e n v i r o n m e n t , t h e d a m a g e

b l e a k c a m p s f a r f r o m u r b a n e m p l o y m e n t a n d c a n n o t b e u n d o n e . S h if ts o v e r t im e in t h e b a l a n c e

s e rv i c es . T h e g o v e r n m e n t c a l le d t h is b e a u t i f i c a - o f p o w e r c a n i n c r e a s e s u b - o p t i m a l l e ve l s o f e n v i-

t i o n . T h e b e n e f i t s t o t h e p o o r o f l iv i ng i n t h e r o n m e n t a l l y d e g r a d i n g a c t iv i t ie s , b u t c a n n o t r e -

s h a n t y t o w n s p r o b a b l y o u t w e i g h e d t h e c o s t t o t h e d u c e s u c h l o n g - t e r m c o s t s o f e x c e s s i v e l e v el s .

r i c h o f g l i m p s i n g t h e s q u a l o r f r o m t h e i r p a s s i n g T h i r d , t h e r i si n g m a r g i n a l c o s t c u r v e i m p l i e s

a u t o m o b i l e s . B u t i n t h is i n s ta n c e , p o w e r i n e q u al - t h a t t h e e x c e ss e n v i r o n m e n t a l d e g r a d a t i o n d ri v e n

i ty g e n e r a t e d w h a t m i g h t b e t e r m e d e x c e s s iv e b y p o w e r f u l w i n n e r s is m o r e d a m a g i n g t h a n t h e

e n v i r o n m e n t a l p r o t e c t i o n , l o w e r l e ve l s p r e v e n t e d b y p o w e r f u l l o se r s. F i n al ly ,

T h e q u e s t i o n , t h e n , is w h e t h e r t h e s e tw o e l - i f w e t a k e a c c o u n t o f t h e b e n e f i t s d e r i v e d f r o m

f e c t s c a n b e e x p e c t e d t o o f f s e t e a c h o t h e r , s u c h t h e e n v i r o n m e n t a l l y d e g r a d i n g a c ti v it y a s w e l l a s

t h a t p o w e r i n e q u a l i t y h a s n o p r e d i c t a b l e n e t a g - i ts c o s t s, both s i tu a t io n s - t o o m u c h e n v i r o n m e n -

g r e g a t e i m p a c t o n th e le v e l o f e n v i r o n m e n t a l t al d e g r a d a t i o n a n d t o o l it tl e - c r e a t e w e l f a r e

d e g r a d a t i o n . I t h i n k n o t , f o r f o u r r e a s o n s , l o s se s . T h e s e l o s se s a r e a d d i t i v e , n o t m u t u a l l y

F i r st , i n s o f a r a s p o w e r c o r r e l a t e s p o s i t iv e l y w i t h o f f s e t t in g .

w e a l t h , s i t u a t i o n s i n w h i c h t h e w i n n e r s a r e p o w - F o r t h e s e r e a s o n s , t h e a b i li t y o f t h e p o w e r f u l

e r f u l c a n b e e x p e c t e d t o o c c u r m o r e f r e q u e n t l y t o l im i t e n v i r o n m e n t a l d e g r a d a t i o n b y t h e le s s

t h a n s i t u a t io n s in w h i c h t h e l o s e r s a r e p o w e r f u l , p o w e r f u l c a n n o t b e e x p e c t e d t o o f f s e t t h e f a i l u r e

T h e r i ch e s t 2 0 % o f t h e w o r l d ' s p e o p l e r e c e i v e o f t h e l es s p o w e r f u l t o l im i t e n v i r o n m e n t a l d e g r a -

8 3 % o f g l o b a l i n c o m e , w h i l e t h e p o o r e s t 6 0 % d a t i o n b y t h e p o w e r f u l . T h e p o w e r - w e i g h t e d s o -

r e c e i v e 6 % ( U n i t e d N a t i o n s D e v e l o p m e n t P r o - c ia l d e c i si o n r u l e y i e ld s a n u n a m b i g u o u s p r e d i c -

g r a m m e , 1 9 92 , p . 3 6 ). S i m i l a r t h o u g h l e ss e x t r e m e t io n : t h e g r e a t e r t h e i n e q u a l i t y o f p o w e r , t h e

d i s p a r i t i e s e x i s t w i t h i n m o s t c o u n t r i e s . H e n c e g r e a t e r t h e e x t e n t a n d s o c ia l c o s t o f e n v i r o n m e n -

e c o n o m i c a c t iv i ti e s d r i v e n b y t h e c o n s u m p t i o n t al d e g r a d a t i o n . T h i s p r e d i c t i o n a s t o m a g n i t u d e s

d e m a n d o f th e r i c h - f r o m w h i c h t h e y d e ri v e is a s e c o n d e l e m e n t f o r a r e s e a r c h a g e n d a i n t h e

b e n e f i t i n t h e f o r m o f c o n s u m e r s ' s u r p lu s - a r e p o l it ic a l e c o n o m y o f e n v i r o n m e n t a l d e g r a d a t i o n .

m o r e w i d e s p r e a d t h a n t h o s e d r i v e n b y t h e c o n -

s u m p t i o n d e m a n d o f t h e p o o r . 5 A n d a s o w n e r s o f

a d i s p r o p o r t i o n a t e sh a r e o f p r o d u c t i v e a s s et s, t h e 4 . I n e q u a l i t y a n d e n v i r o n m e n t a l v a l u a t i o n

r i ch c a p t u r e m u c h o f t h e o t h e r b e n e f i t c o m p o -

n e n t , p r o d u c e r s ' s u r p lu s . T h e f o r e g o i n g p o s i ti v e a n a ly s is d e p a r t s f r o m

S e c o n d , t o o l it tl e e n v i r o n m e n t a l d e g r a d a t i o n t h e n o r m a t i v e f r a m e w o r k o f c o n v e n t i o n a l c o s t -

c a n b e m o r e r e a d i ly c o r r e c t e d th a n t o o m u c h , b e n e f i t a n a ly s is i n o n e i m p o r t a n t r e s p e c t: t h e

d u e to p h y s i c a l i r r e v e r si b i li t ie s . W h e n a s p e c i e s i s d i s t r i b u t i o n o f p o w e r a f f e c t s t h e w e i g h t s a c c o r d e d

e x t i n g ui s h e d , a n o n - r e n e w a b l e r e s o u r c e d e p l e t e d , t o c o s ts a n d b e n e f i t s t o d i f f e r e n t p e o p l e i n s o c ia l

t h e so il w a s h e d a w a y , o r a l o n g - l iv e d p o l l u t a n t d e c i s i o n s . S o f a r , h o w e v e r , I h a v e n o t i n q u i r e d

i n to t h e m o n e t a r y v a l u a t i o n s o f t h e s e c o s ts a n d

b e n e f i t s t h e m s e l v e s , n o r i n t o h o w t h e s e a r e a f -

f e c t e d b y in e q u a l i ty . T o t h e s e q u e s t i o n s I n o w

Environmental degradation per unit consumption is not tu rn .

necessar ily cons tan t across income c lasses . I f degrada tion per M on et ar y va lua t io ns in c os t - be ne f i t ana lys i s

unit were sufficiently greater for item s with greater weight in

the consumption baske t o f the poor , t he ir demand could in a re in th eo ry ba se d on m ar ke t p r i c es , o r m or e

theory account fo r more envi ronmenta l degrada tion than tha t p rec i se ly , on the m ar ke t p r i ce s tha t wo u ld p re va i l

o f the r i ch , no twi thstand ing the ir lower share o f aggrega te in the h yp o th e t i ca l wo r ld o f a per f ec t ly co m pe t i -

consumption. Empirical ly , i t seems improbable that variat ions t ive ge ne ra l eq ui l ib riu m . T h es e pr ic es h av e thr ee

in degradation pe r un it consum ption would yield this dramatic

f u n d a m e n t a l d e t e r m i n a n t s , u s u a ll y t a k e n a s e x -

a re sult. Indeed, it is conceivable that d egradation per unit

consumption is greater f or t he r ic h; c o mp a re , f or e x a mp l e , o g e n o u s : t h e i n i ti a l d i s t r i b u t i o n o f e n d o w m e n t s ,

i c y c l e s a nd a uto mob ile s, c o n s u m e r p r e f e r e n c e s , a n d t e c h n o l o g y .


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174 J.K.

Boyce Ecological Economics 11 1994) 169-178

In practice, problems arise from market fail- income inequality might affect the conversion of

ure, incomplete information, price distortions, tropical forests to cattle ranches. If the increased

and so on. These have generated a voluminous purchasing power of relatively rich consumers

literature, the guiding principle of which remains raises marke t demand for beef, the ben efi t

valuation in terms of willingness to pay. The costs from deforestat ion increases. Meanwhile, as in-

of air pollution, for example, are measured in comes decline for poorer people hurt by conver-

terms of how much the affected parties would be sion - for example, hunter -gatherers living in the

willing to pay for cleaner air. forest or small farmers living downstream - so

Willingness to pay is constrained, of course, by does their ability (and hence willingness) to pay

ability to pay. The latter in turn depends on the to prevent it. The cost of deforestation falls

initial distribution of endowments. In real-world accordingly. The result - prescribed by cost -ben-

markets and in the shadow markets of cost-be- efit analysis and predicted by the power-weighted

nefit analysis, diffe rent distributions generate dif- social decision rule - is more deforestation .

ferent prices. For example, if wealth is highly Nor is that all. Inequalities of power and wealth

concentra ted, demand for basic necessities like also affect the two othe r fundamental determi-

rice and beans will be less than if wealth is more nants of market and quasi-market prices in the

equitably distributed, and their efficient level neoclassical model: preferences and technology.

of output will consequently be lower. Similarly, Again, greater inequality can be expected to in-

the efficient level of air pollution is higher crease environmental degradation.

when those who breathe the dirty air are poor First consider preferences. As Becker (1983, p.

than when they are rich, for the simple reason 392) observes, 'prefe renc es' can be manipulated

that the poor's ability and willingness to pay to and created through the information and misin-

avoid it is lower. 6 formation provided by interested pressure

The effect of regressive income redistribut ion groups. A person's preference for clean air de-

- in the case argued above to be most important, pends, among other things, on access to informa-

when those who bear the costs of the environ- tion about air quality and about the health effects

mentally degrading activity are poor relative to of air pollution (see, for example, Bergstrom et

those who reap its benef its - is depicted in Fig. 2. al., 1990). It also depends on how that person

The solid lines are the original marginal valuation values air quality relative to other wants. Access

curves. The broken lines depict the same curves to information and values both may be affected

after a redistribution of income from the poorer by the degree of inequality. With greater inequal-

losers to the richer winners. The efficient level ity, the relatively poor and powerless tend to have

of environmental degradation increases from

D s

less access to information about environmental

to D~. The level predicted by the power-weighted costs and, at the same time, to be more exposed

social decision rule, while holding the power to propaganda designed to make pollution seem

weights constant, increases from

D s o R

to

D s 9 n .

palatable or worth the cost (Galbraith, 1973, p.

If income redistribut ion is accompanied by simi- 9). In terms of Fig. 2, these preference effects

lar redistribution of power, then the predicted cause a fur ther downward shift in the marginal

level of environmental degradation increases still cost curve, and hence a further increase in the

further to

D~Ol~.

level of environmental degradation.

Consider, for example, how an increase in Similarly, if we shed the exogenous-technology

assumption, and recognize that the pattern of

technological change is subject to economic and

political influences, this opens another route by

6 The alternative method for valuation of health impacts of

which inequality may affect environmental valua-

pollution via the present value of foregone earnings pro-

tions. The benefit that consumers derive from

an

duces a similar result. See for example t he memoran dum of

World Bank Chief Economist Lawrence Summers published

environmentally degrading economic activity de-

in The

Economist

(1992). pends in part on the availability of less environ-


7/10

J .K . B o y c e / E c o l o g i c a l E c o n o m i c s 11 1 9 94 ) 1 6 9 - 1 7 8

175

W i n n e r s L o s e r s

m a r g i n a l m a r g i n a l

. / [ .

l J : i

. .~ ,

x x x: :

0 D s D ' D S D R D ' D R D S D R

L e v e l o f e n v i r o n m e n t a l d e g r a d a t i o n

F i g 2 T h e e f f e c t o f r e g r e s s i v e i n c o m e r e d i s t r i b u ti o n o n t h e l e v e l o f e n v i r o n m e n t a l d e g r a d a t i o n : b e f o r e r e d i s t ri b u t i o n

. . . . . . : a f t e r r e d i s t r i b u t i o n .

m e n t a l l y d e g r a d i n g a l t e rn a t i v e s . T h e l a t t e r m a y d o l l a r w a s l e v ie d a g a i n s t t h e G e n e r a l M o t o r s

b e l im i t e d b y t h e p o w e r o f v e s t e d i n t e re s t s to t r e a s u r e r w h o m a s t e r m i n d e d t h e s c h e m e . B y t h is

s h a p e t h e p a t h o f t e c h n o l o g i c a l c h a n g e , t im e , h o w e v e r , t h e n a t i o n ' s g r o u n d - t r a n s p o r t a t i o n

L e t m e i ll u s t ra t e b y m e a n s o f a n e x a m p l e . A i n d u s t r y h a d b e e n f ir m l y r e o r i e n t e d to t h e n e w

m o m e n t o u s t e c h n o l o g i c a l c h o i c e i n g r o u n d t r a n s - t e c h n o l o g i c a l p a t h . 7

p o r t a t i o n is t h a t b e t w e e n t h e i n t e r n a l c o m b u s t i o n T h e m a r g i n a l b e n e f i t o f d r i vi n g a n a u t o m o b i l e

e n g i n e a n d t h e e l e c t r ic r a il w a y . E a r l y i n t h e t w e n - a n d s p e w i n g e x h a u s t i n t o t h e a i r is m u c h e n -

t i e t h c e n t u r y , t h e U n i t e d S t a t e s h a d a n e x t e n s iv e h a n c e d i f o n e l ac k s t h e o p t i o n o f t r a v e l b y t r a in .

e l e c t r i c ra i l s y s t e m b o t h w i t h i n c i ti e s ( t r o l l e y I n t e r m s o f F i g . 2 , t h e e f f e c t is t o ra i s e t h e

c a r s ) a n d b e t w e e n t h e m . T o d a y t h a t n e t w o r k h a s m a r g i n a l b e n e f i t c u r v e a s s o c i a t e d w i t h t h is e n v i-

b e e n la r g e l y s u p p l a n t e d b y m o t o r v e h i c l e s p l y in g r o n m e n t a l l y d e g r a d i n g a c ti v it y , t h e r e b y i n c r e a s in g

c o n c r e t e h i g h w a y s. T h e e n v i r o n m e n t a l c o s t s o f t h e l e ve l o f e n v i r o n m e n t a l d e g r a d a t i o n . O f c o u r s e ,

t h i s h i s t o r i c s o c i a l d e c i s i o n i n c l u d e v a s t a i r p o l l u - t h e t r i u m p h o f t h e i n t e r n a l c o m b u s t i o n e n g i n e i n

t i o n a n d a c c e l e r a t e d d e p l e t i o n o f f o ss il f u e ls . I n U . S . g r o u n d t r a n s p o r t a t i o n w a s n o t si m p l y t h e

m a n y c i ti e s - i n c l u d in g L o s A n g e l e s , w h i c h t o d a y r e s u l t o f c o n s p i r a t o r i a l m a c h i n a t i o n s . B u t n e i t h e r

h a s t h e m o s t u n h e a l t h f u l a i r q u a l i ty i n t h e n a t i o n w a s i t t h e r e s u l t o f p e r f e c t c o m p e t i t i o n i n t h e

- a c o n s o r t i u m f o r m e d b y G e n e r a l M o t o r s , S t an - f a c e o f a n e x o g e n o u s ly d e m a r c a t e d p r o d u c t i o n

d a r d O i l o f C a l i f o r n ia , a n d F i r e s t o n e T i r e C o m - p o s s ib i li ty f r o n t i e r .

p a n y p l a y e d a n i m p o r t a n t r o l e i n t h i s t r a n s i t i o n : i t

p u r c h a s e d l o c a l r a il li n e s , p h y s i c a l l y d e m o l i s h e d

t h e m , s o l d t h e r a i l r o a d r i g h t s - o f - w a y , a n d c o n -

7 F o r a b r i e f a c c o u n t o f t h i s r e m a r k a b l e c h a p t e r o f U . S .

v e r t e d m a s s t r a n s p o r t a t i o n t o b u s e s . I n 1 9 4 9 , t h e

h i s t o ry , s e e C o m m o n e r 1 9 7 6 , p p . 1 7 7 - 1 7 9 ) . F o r d e t a i l s a n d

p a r t i e s i n v o l v e d w e r e c o n v i c t e d o f c o n s p i r a c y b y a d e b a t e , s e e S n e l l 1 9 7 4 ) , W h i t t a n d Y a g o 1 9 8 5 ), a n d A d l e r

U . S . F e d e r a l C o u r t , a n d a s y m b o l i c f i n e o f o n e (1991).


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176

J.K. Boyce Ecological Economics 11 1994) 169-178

In sum, inequalities of wealth and power affect fect concern for the long-term consequences of

valuations of the costs and benefits of environ- resource depletion or environmental pollution? I

mental degradation via the distribution of pur- hypothesize that greater inequality leads to a

chasing power, the shaping of preferences, and higher rate of environmental time preference,

influences on the path of technological change, that is, to less concern for the future, and that

By each route, greate r inequality tends to raise this is true for both rich and poor, though for

the valuation of benefits reaped by rich and pow- different reasons.

erful winners, relative to costs imposed on poor First consider the impact of greater inequality,

and less powerful losers. 8 These valuation effects with average per capita income held constant, on

reinforce the linkage between inequality and en- the time prefe rence of the poor. As poverty deep-

vironmental degr adat ion und er the power- ens, the imperatives of day-to-day survival compel

weighted social decision rule. the poor to degrade the environment. In Central

America, for example, it drives poor peasants to

cultivate steep hillsides causing rapid soil erosion.

5.

n e q u a l i t y a n d e n v i r o n m e n t a l t i m e p r e f e r e n c e

The linkage here runs from inequality to poverty

to environmental degradation. If the poor are

One further dimension - time - can now be themselves the principal victims of this environ-

added to the analysis. Environmentally degrading mental degradation, the result is a vicious circle

activities often genera te short-run benefits and in which, by trading short-run gains for long-run

long-run costs. The benefits from the indiscrimi- costs, the poor grow steadily poor er (Durning,

nate logging of a forest, for example, accrue 1989; World Bank, 1992).

quickly with the sale of the timber, while costs in In many instances, this undoubt edly is an im-

the form of soil erosion, disruption of hydrologi- portan t link between inequality and environmen-

cal cycles, and biodiversity loss can persist far tal degradation . But it is not the only link, nor

into the future, necessarily the most important. In particular, it

The rate of time prefe rence refers to the will- completely fails to account for environmental

ingness to trade present benefits (or costs) for degradation by the rich. Yet, as I have suggested

future benefits (or costs). People with a higher above, the latter may be more pervasive than

rate of time prefe rence place greater weight on environmental degradation by the poor.

the present. They are more willing to accept How does greate r inequality affect the rate of

long-run costs for short-run benefits, and less environmental time prefe rence of the rich? The

willing to accept short-run costs for long-run conventional assumption is that wealth and the

gains. This notion can refer to financial savings as rate of time pre fer ence are inversely related, not

well as to environmental resources. It is possible, only among the poor, but throughout the entire

however, that the same peop le will apply differ- range of wealth. Thus the richest individuals os-

ent rates of time pre fer ence to different types of tensibly have the highest savings rates - a key

resources. My concern here is the rate applied to element in the proffered rationale for trickle-

environmental resources, including clean air, down economic policies. If the same were true

clean water, soils, and othe r natu ral capital . I for the rate of environmental time preference,

refer to this as the

ra t e o f env i ronmen ta l t ime

then greater inequality (and the resulting higher

preference incomes for the rich, holding average income

How do inequalities of power and wealth af- constant) would make the rich less myopic in

their assessment of long-term environmental

costs. Their lower rate of time preference would

tend to offset the higher rate of the poor. Indeed,

8 By the same token greater inequality would enhance the

the net result of greater inequality conceivably

ability of rich and powerful losers to constrain environmen-

tally degrading activities by poor and less powerful winners

could be a virtuous circle in which the in-

As argued above however this offers only meager solace creased farsightedness of the rich raises long-run


9/10

Z K . B o y c e / E c o l o g i c a l E c o n o m i c s 11 1 9 94 ) 1 6 9 - 1 7 8

1 7 7

i n c o m e s n o t o n l y f o r t h e t h e m s e l v e s , b u t f o r w i th t i m e c o m e s t h e p o s si b il it y t h a t p o w e r a n d

s o c i e t y a s a w h o l e . T h i s i s s i m p l y a n e x t e n s i o n o f w e a l t h - p e r e n n i a l o b j e c t s o f c o n t e s t a t i o n a m o n g

t h e t r i c k l e - d o w n l o g ic t o t h e e n v i r o n m e n t , i n d i v id u a l s , g r o u p s , a n d c l a s s e s - m a y b e r e a l l o -

I n m y v i e w , t h i s w o u l d b e t o o s a n g u i n e a c a t e d .

c o n c l u s i o n . I n d e e d , i t i s p l a u s i b l e t h a t i n c r e a s e d M o r e g e n e r a l l y , I a d v a n c e t h e f o l lo w i n g b y -

i n e q u a l i t y c o u l d h a v e t h e o p p o s i t e e f f e c t , r a i s i n g p o t h e si s : T h e g r e a t e r t h e d e g r e e o f p o li ti c a l a n d

t h e r a t e o f e n v i r o n m e n t a l t i m e p r e f e r e n c e o f t h e e c o n o m i c i n e qu a l it y , t h e h i g h e r t h e r a t e o f e n v i-

r i ch . r o n m e n t a l t i m e p r e f e r e n c e o f t h e r i ch . I t i s n o t

C o n s i d e r tw o h y p o t h e t i c a l c o u n t r ie s , b o t h w i t h o n ly d i c t a to r s w h o f e a r t h e re a l l o c a ti o n o f p o w e r

l a r g e r e s e r v e s o f n a t u r a l r e s o u r c e s . I n c o u n t r y A , a n d w e a l t h . I n e q u a l i ti e s m a y f a t t e n f o r e i g n b a n k

a w e a l t h y d i c t a t o r m o n o p o l i z e s p o w e r a n d t h e r e a c c o u n ts , b u t th e y d o n o t p r o t e c t t h e e n v i r o n -

i s a h i g h d e g r e e o f e c o n o m i c i n e q u a l it y . C o u n t r y m e n t a t h o m e . ~

B i s i d e n t i c a l i n e v e r y r e s p e c t e x c e p t t h a t i t h a s A s a r e a l - w o r l d e x a m p l e , c o n s i d e r t h e P h i l ip -

m u c h h i g h e r d e g r e e s o f p o l it ic a l d e m o c r a c y ( h e r e p i n e s u n d e r P r e s id e n t F e r d i n a n d M a r c o s . D u r i n g

d e f i n e d a s e q u i t y i n t h e d i s t r ib u t i o n o f p o w e r ) t h e t w o d e c a d e s o f M a r c o s r u l e , t h e P h i l i p p i n e s

a n d e c o n o m i c e q u i t y . W h i c h c o u n t r y w i ll h a v e t h e r i c h t r o p i c a l h a r d w o o d f o r e s t s w e r e r a p i d l y f e l l e d

h i g h e r r a t e o f e n v i r o n m e n t a l d e g r a d a t i o n ? f o r t i m b e r , w i t h l it tl e e f f o r t t o m i n i m i z e t h e e n v i-

T h e d i c t a t o r o f c o u n t r y A e f f e ct iv e l y c o n t r o ls r o n m e n t a l i m p a c t s o f d e f o r e s t a t i o n . E x p o r t s o f

i ts r a t e o f r e s o u r c e e x t r a c ti o n a n d t h e a s s o c i a t e d l og s a n d l u m b e r r a n k e d a m o n g t h e c o u n t r y s t o p

d e g r e e o f e n v i r o n m e n t a l d e g r a d a t i o n . A s a f o r e i g n - e x c h a n g e e a r n e r s u n ti l t h e e a r ly 1 98 0s

w e a l t h y m a n , h e m a y h a v e a h i g h f i n a n c i a l s a v i n g s w h e n r e v e n u e s c o l l a p s e d d u e t o t h e v i r t u a l d e p l e -

r a t e a n d , i n t h i s r e s p e c t , a l o w r a t e o f t i m e t i o n o f e c o n o m i c a l l y a c c e s s i b l e f o r e s t s ( f o r d e -

p r e f e r e n c e . B u t h e m a y c h o o s e t o h o l d t h e b u l k t a il s, s e e B o y c e , 1 99 3, p p . 2 2 5 - 2 4 1 ) . T h e c u t - a n d -

o f th e s e s a v i n g s o u t s i d e h i s o w n c o u n t r y - i n r u n p h i l o s o p h y o f M a r c o s a n d h i s p o l i t ic a l a s s o c i-

S w is s b a n k s , M a n h a t t a n r e a l e s t a t e , M e d i t e r - a t e s w a s p e r f e c t l y c o n s i s te n t w i th t h e f o r e g o i n g

r a n e a n v i ll a s. W i t h i n h i s o w n c o u n t r y , m e a n w h i l e , a n a l y si s .

t h e d i c t a t o r s r a t e o f e m i r o n m e n t a l t i m e p r e f e r -

e n c e m a y b e q u i t e h i g h : h e m a y c h o o s e t o e x tr a c t

n a t u r a l r e s o u r c e s a s q u i c k ly a s p o s s i b l e , w h i l e 6 . C o n c l u s i o n

s h u n n i n g m o r e c o s tl y m e t h o d s w h i c h w o u ld m i ti -

g a t e t h e a s s o c i a t e d e n v i r o n m e n t a l i m p a c t . I s t h e T h i s e s s ay h a s a d v a n c e d t w o c e n t r a l h y p o t h e -

d i s j u n c t u r e b e t w e e n t h e d i c t a t o r s f i n a n c i a l s a v i n g s e s. F i r s t, t h e e x t e n t o f a n e n v i r o n m e n t a l l y d e -

a n d h is e n v i r o n m e n t a l d i s s a v in g a s y m p t o m o f g r a d i n g a c ti v it y d e p e n d s o n t h e b a l a n c e o f p o w e r

s c h i z o p h r e n i a ? N o t i f w e r e c o g n i z e t h a t t h e d i c ta - b e t w e e n t h e w i n n e rs , w h o d e r i v e n e t b e n e f i t s

t o r s h o l d o n p o l i t ic a l p o w e r - a n d w i t h it , h i s d e f r o m t h e a c t iv i ty , a n d t h e l o s e r s , w h o b e a r n e t

f a c t o p r o p e r t y r ig h t s o v e r t h e c o u n t r y s n a t u r a l c o st s. W h e n t h e w i n n e r s a r e p o w e r f u l r e l a ti v e t o

r e s o u r c e s - is i n h e r e n t l y i n s e c u re . E v e n t u a l l y h is t h e l o se r s, m o r e e n v i r o n m e n t a l d e g r a d a t i o n o c-

o p p r e s s e d f e ll o w c i t iz e n s m a y s u c c e e d in o v e r - c u r s t h a n in t h e r e v e r s e s i t u a ti o n . T h i s r e f l e c t s

t h r o w i n g h i m . T h e p r u d e n t d i c t a t o r h e d g e s

a g a i n s t t h a t p o s s i b il i ty b y f e a t h e r i n g a f o r e i g n

n e s t .

I s u b m i t t h a t t h e d i c t a t o r s d e g r e e o f i n s e c u r it y

a n d h e n c e h i s r a t e o f t i m e p r e f e r e n c e w i th

~

Alternatively, we could say that

i n e q u a l i t y

shifts the port-

r e s p e c t t o t h e c o u n t r y s n a t u r a l r e s o u r c e s - i s a

f o l i o s e l e c t i o n o f t h e r i c h i n f a v o r o f e x t e r n a l a s o p p o s e d t o

f u n c t i o n o f t h e d e g r e e o f p o l it ic a l a n d e c o n o m i c d o m e s t i c s s e t s . Since m an y domest ic environmental re-

i n e q u a l it y . T h e r e a s o n i s s i m p l e : t h e s e i n e q u a l i - s o u r c e s a r e n o t f u l ly p r i v a t e t h e y c a n b e e x c h a n g e d f o r

e x t e r n a l a s s e t s o n l y i f f i rs t h a r v e s t e d o r m i n e d . R e s o u r c e

t ie s u n d e r m i n e t h e r u l e r s l e g it im a c y . F o r t h e d e p l e t i o n c a n h e r e b e i n t e r p r e t e d a s in p a r t a s o c ia l c o s t o f

m o m e n t , t h e d i c t a t o r w i e l d s g r e a t p o w e r , b u t p r iv a ti za ti on .


10/10

178 J . / (

Boyce Ecological Economics 11 1994) 169-178

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w e a l t h l e a d

t o m o r e

e n v i r o n m e n t a l d e g r a d a t i o n

G r o w t h a n d I m p o v e r i s h m e n t in t h e M a r c o s E r a . M a c m i l -

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t h e v a lu a t i o n o f b e n e fi t s r e a p e d b y r ic h a n d p o w -

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t i es D e v e lo p m e n t Co n s o r t i u m Co n f e r e n c e a n d

P e t e r s o n , D . J ., 1 9 93 . T r o u b l e d L a n d s : T h e L e g a c y o f S o v i e t

E n v i r o n m e n t a l D e s t r u c t i o n . W e s t v i e w , B o u l d e r , 2 7 6 p p .

t h e S e m i n a r o n t h e I m p a c t o f E c o n o m i c P o li c y o n

P r y d e , P .R . , 1 9 91 . E n v i r o n m e n t a l M a n a g e m e n t i n t h e S o v i e t

S u s t a in a b l e D e v e lo p m e n t i n t h e A g r i c u l t u r al S e c - U n i o n . C a m b r i d g e U n i v e r s i t y P re s s , C a m b r i d g e , 3 1 4 p p .

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The usua l d i sc la imers app ly .

C o m m i t t e e o n t h e J u d i c i a r y , U .S . S e n a t e . U .S . G o v e r n -

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U n i t e d N a t i o n s D e v e l o p m e n t P r o g ra m m e , 1 9 9 2. H u m a n D e -

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Boyce Inequality

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