Decentralization and Environmental Quality: An International Analysis of Water Pollution Levels and Variation

This paper explores the empirical effects of decentralization on environmental quality by studying water pollution in rivers around the world. It examines the level of pollution and variation in pollution across jurisdictions within a country, for both a local and a regional pollutant. Federal countries exhibit greater interjurisdictional variation in pollution, supporting the traditional view that decentralization allows policies more tailored to local conditions. The analysis does not point to a “race to the bottom” in pollution levels. (JEL H73, Q53)