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The Conservation Multiplier

Author

Listed:
  • Bård Harstad
Abstract
EvEvery government that controls an exhaustible resource must decide whether to exploit it or to conserve and thereby let the subsequent government decide whether to exploit or conserve. This paper develops a model of this situation and shows when a small probability that some future government will exploit has a multiplier effect on earlier decisions. The multiplier can be taken advantage of by a lobby paying for exploitation, or by a donor compensating for conservation. The analysis also uncovers when compensations are optimally offered to the president, the party in power, the general public, or to the lobby group.

Suggested Citation

  • Bård Harstad, 2020. "The Conservation Multiplier," CESifo Working Paper Series 8283, CESifo.
  • Handle: RePEc:ces:ceswps:_8283
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp8283.pdf
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    References listed on IDEAS

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    Cited by:

    1. Foarta, Dana & Ting, Michael, 2023. "Organizational Capacity and Project Dynamics," CEPR Discussion Papers 17817, C.E.P.R. Discussion Papers.
    2. Voss, Achim & Schopf, Mark, 2021. "Lobbying over exhaustible-resource extraction," European Economic Review, Elsevier, vol. 135(C).
    3. Donato Masciandaro, 2023. "Politicians, Trust and Financial Literacy: When Do Politicians Care?," BAFFI CAREFIN Working Papers 23206, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    4. Costa, Francisco J M & Szerman, Dimitri & Assunção, Juliano, 2024. "The Environmental Costs of Political Interference: Evidence from Power Plants in the Amazon," SocArXiv 6y7vk, Center for Open Science.
    5. Bård Harstad, 2020. "Trade and Trees: How Trade Agreements Can Motivate Conservation Instead of Depletion," CESifo Working Paper Series 8569, CESifo.
    6. Foarta, Dana & Ting, Michael, 2023. "Organizational Capacity and Project Dynamics," CEPR Discussion Papers 17817, C.E.P.R. Discussion Papers.
    7. Bård Harstad & Kjetil Storesletten, 2023. "Conservation by Lending," CESifo Working Paper Series 10533, CESifo.
    8. Donato Masciandaro, 2023. "Politicians, Trust, Financial Literacy and Financial Education: When Do Politicians Care?," BAFFI CAREFIN Working Papers 23208, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

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    More about this item

    Keywords

    dynamic games; exhaustible resources; deforestation; political economy; lobbying; multiple principals; conservation.;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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