Files
Abstract
This paper studies the ability of the political process to design public
policies implying an effective and efficient provision of global and local environmental
public goods. While it is commonly accepted that the market is unable to
guarantee an efficient provision of public goods, such as environmental protection
or food security, the question is if or under which condition political processes are
efficient mechanisms of public good provision. Beyond policy failure due special
interest politics policy failure also results from the fact that economic processes
are often rather complex and hence laymen use simple mental models (political beliefs)
to understand policy impacts. If political beliefs are biased political decision making
based on public opinion leads to rather inefficient policies establishing the
paradox of populist democracy policy failure. We use own choice experiment data
on sustainable land use policy in Germany to estimate econometrically the WTP
for relevant global and local environmental public goods as well as voters' political
willingness-to-vote for specific land use policies. Based on these estimations
we derive underlying political belief. Further, we assess to what extend a populist
democracy policy failure results, i.e. to what extend policy choices driven by political
beliefs imply inefficient land use policies when compared to the counterfactual
evidence-based policy choices driven by model-based technological relations.