TAILIEUCHUNG - Decentralization and Water Pollution Spillovers: Evidence from the Re-drawing of County Boundaries in Brazil

Effective solutions to water quality challenges exist and have been implemented in a number of places. It is time for a global focus on protecting and improving the quality of the world’s freshwater resources. There are three fundamental solutions to water quality problems: (1) prevent pollution; (2) treat polluted water; and (3) restore ecosystems. Focus on pollution prevention Pollution prevention is the reduction or elimination of contaminants at the source before they have a chance to pollute water resources – and it is almost always the cheapest, easiest, and most effective way to protect water quality. Pollution prevention strategies reduce or eliminate. | Decentralization and Water Pollution Spillovers Evidence from the Re-drawing of County Boundaries in Brazil Molly Lipscomb Department of Economics University of Colorado at Boulder Ahmed Mushfiq Mobarak Yale University School of Management Correspondence Mushfiq Mobarak Preliminary Draft 11 30 2007 Comments Welcome Abstract We examine the effect of political decentralization on pollution spillovers across jurisdictional boundaries. Upstream water use has spillover effects on downstream jurisdictions and greater decentralization . a larger number of political jurisdictions managing the same river may exacerbate these spillovers as upstream communities have fewer incentives to restrain their members from polluting the river at the border. We use GIS to combine a panel dataset of 9 000 water quality measures collected at 321 monitoring stations across Brazil with maps of the evolving boundaries of the 5500 Brazilian counties to study a whether water quality degrades across jurisdictional boundaries due to increases in pollution close a river s exit point out of a jurisdiction and b what the net effect of a decentralization initiative on water quality is once the opposing impacts of inter-jurisdictional pollution spillovers and increased local government budgets for cleaning up the water are taken into account. We take advantage of the fact that Brazil changes county boundaries at every election cycle so that the same river segment may cross different numbers of counties in different years. We find evidence of strategic enforcement of water pollution regulations there is a significant increase in pollution close to the river s exit point from the upstream county and conversely a significant decrease in pollution when the measure is taken farther downstream from the point of entrance. Pollution increases by for every kilometer closer a river gets to the exiting border but in the stretch within 5 kilometers of the border this increase jumps

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