The Effects of Local Environmental Institutions on Perceptions of Smoke and Fire Problems in Brazil

Environmental concern in developing countries has risen rapidly over the past decade. At the same time, decentralization and civic participation in environmental policy-making have also burgeoned. This paper uses data from the Brazilian Municipal Environmental Survey 2001 to examine the causal effect of municipio (county) level environmental institutions on perceptions about environmental problems in Brazil. Consistent with models of public choice, the analysis assumes that the existence of an environmental secretary or an environmental council is related to characteristics of the municipio population. To control for endogeneity - the possibility that the presence of environmental institutions merely signals constituents' tastes rather than influences municipal actions - the authors construct a system of equations that identifies the causal impact of the institutions. Estimation via a trivariate probit model allows for correlation of unobserved determinants of problem perception, presence of an environmental secretary, and presence of an environmental council. The results suggest that the presence of environmental secretaries has a strong, highly significant, positive causal effect on environmental problem perception. Presence of local environmental councils with civic participation has a significant but weaker impact on environmental problem perception. The authors conclude that local environmental institutions indeed shape local environmental awareness and that participatory institutions can influence local government.