Development, Environmental Policy, and Mass Media: Theory and Evidence

This paper investigates the relationship between development, environmental policy determination, and mass media. It stresses the role of mass media as a channel through which the level of development influence environmental policy making. Special interests appear to wield considerable influence over environmental policies, and create policy distortion. We develop a model with two political parties competing in election and policy influence by special interests to study environmental policy determination. Mass media acts as information provider to voters in the election. It informs voters regarding environmental policy platforms announced by the political parties. The theory suggests that, as development progresses, environmental awareness rises and so does the demand for environmental news. This induces profit maximizing media form to report more environmental news, and in turn keeps voters better informed regarding the policy platforms of the parties. We find that, in equilibrium, a more stringent environmental policy is implemented when the voters are better informed through mass media. The model also demonstrates the way in which process of development brings about the stringency of environmental policy at a level closer to the social optimum when special interests present. Empirical evidence across countries supports our fndings.