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NilsDroste

Nils Droste

Principal Investigator | Associate Senior Lecturer

NilsDroste

Municipal Responses to Ecological Fiscal Transfers in Brazil : A microeconometric panel data approach

Author

  • Nils Droste
  • Guilherme Rodrigues Lima
  • Peter Herman May
  • Irene Ring

Summary, in English

Ecological fiscal transfers in Brazil, the so‐called ICMS‐Ecológico or ICMS‐E, redistribute part of the state‐level value‐added tax revenues on the basis of ecological indicators to local governments. We analyze whether the introduction of this economic instrument in a state offers incentives to municipal responses in terms of further protected area (PA) designation. We provide a microeconomic model for the functioning of ICMS‐E and test the derived hypothesis empirically. Employing an econometric analysis on panel data for two decades we estimate the correlation of the introduction of ICMS‐E in Brazilian states with PA coverage. We find that the introduction of ICMS‐E correlates with a higher average PA share. While the introduction of ICMS‐E schemes may be a compensation for a high share of federal and state PA, we also find an incentive effect for municipalities to designate additional PA.

Publishing year

2017-07-01

Language

English

Pages

378-393

Publication/Series

Environmental Policy and Governance

Volume

27

Issue

4

Document type

Journal article

Publisher

Wiley-Blackwell

Status

Published

ISBN/ISSN/Other

  • ISSN: 1756-932X