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How Inequality Limits our Environmental Policy Capacities

Authors:

Abstract

[This paper was presented in a panel convened by the authors, entitled, "Inequality and the Environment: What Does it Mean for Public Administration and Policy?"] Over the past few decades, the traditional concern with efficiency in the design and implementation of environmental programs in the public sector has been augmented by a concern with equity, usually captured in the concept of environmental justice. Another issue that has drawn less attention is the effect of economic and political inequality on the ability to respond to and manage environmental problems. Rising economic inequality in the United States and other developed countries, coupled with worsening environmental stresses that exacerbate existing unequal environmental conditions makes this a matter of great importance for the public sector. Inequality is not only a result of the distribution of environmental and health risks, it also is a factor that influences societal capacities for solving problems, which directly impacts the roles of public administrators.
Inequality and the Environment:
What Does It Mean for Public Administration and Policy?
By
Daniel J. Fiorino
dfiorino@american.edu
Riordan Frost
riordan.frost@american.edu
Center for Environmental Policy
American University
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Presented at the Annual Conference of the American Society for Public Administration, Chicago,
IL, March 7, 2015. Do not cite or quote without the authors’ permission.
Inequality and the Environment:
What Does It Mean for Public Administration and Policy?
If you want to develop the cooperative spirit that will help everyone overcome
collective action problems, don’t get rich, get equal. (Uslaner 2002, 255)
Do the levels of economic and political inequality in a society affect its ability to manage
and resolve environmental problems? Since the rise of modern environmentalism in the 1960s,
the central tension in political debates has been the linkages among environmental and economic
goals. More recently, however, two developments brought inequality into the environmental
policy picture. One was the emergence of sustainable development, which expanded the standard
economy-environmental dyad to a triad by adding the social aspect. The core concept in this
social aspect is equity, both in terms of quality of life and political empowerment. The second
development was the rise of the environmental justice movement, inspired by evidence that
minority and low-income groups bore a disproportionate share of the societal burdens of
pollution and waste.
In sustainability writing, the focus on inequality has been motivated largely by normative
concerns—that some level of economic, social, and political equality is desirable, necessary, and
the right thing to do. Although there is growing attention to the practical effects of inequality on
environmental policy, such as in the 2011 Human Development Report of the United Nations
Development Program, the social aspect is framed largely on normative terms.
Within the environmental justice movement, the focus has been on the effects of policy
outcomes on different groups in society. Most research has looked into the disproportionate
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effects of air and water pollution, siting of waste disposal and treatment facilities, and exposure
to lead and other toxins on historically disempowered communities (Brulle & Pellow 2006, 106).
To be sure, there has been attention to the role of political and economic inequality in producing
outcomes, which has led to an emphasis on mobilizing minority and low-income groups. In
general, however, the focus has been more on disparities in exposure to environmental harms and
lack of access to amenities than on the effects of inequality on policy capacities and outcomes.
The purpose of this paper is to draw attention to and set out propositions regarding the
empirical effects of inequality on a nation’s environmental policy performance and capacities. Is
inequality more than a normative issue in sustainability terms? Are there practical connections—
empirical relationships—that link the social aspects of sustainability to ecological outcomes?
The paper begins with a brief look at trends in economic inequality in the United States.
Although there is debate about specifics, the evidence points to rising inequalities in income and
wealth, even more than in other developed countries. The paper then presents a theoretical case
for how inequality influences performance and capacity and reviews cross-national research on
the topic. The conclusion considers implications for public administration research and practice.
General Trends in Economic Inequality in the United States
In 2012 it was reported that the six surviving heirs to the Walmart fortune controlled
more wealth than the bottom forty percent of the population in the United States (Bivens 2012).
A study published in January 2014 reported that economic mobility in the US had been frozen
for some three decades; children born into low-income groups had no better chance of rising
above that status than they did in the early 1970s (Chetty et al. 2014). By 2010, the top one
percent earned one-fifth of US market income, and the top half of one percent took in five
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percent. This was the highest income concentration since 1928, on the eve of the Great
Depression. Since 1970, the bottom nine-tenths of the population have seen almost no income
increase.
Measures of economic inequality are increasing in most countries, most clearly in the US
(discussion based on Dadush et al. 2012). A standard way of measuring economic inequality is
the GINI Index. The score for a country is based on a scale of 0 to 1.0. A GINI of zero describes
complete equality, in which everyone has the same income, whereas a GINI of 1.0 means that all
of the income is concentrated in one person; the higher the score, the greater is the inequality in
income distribution. In 1979, the US GINI was 0.48; by 2007 it had risen to 0.59. In this same
period, the GINI rose in 17 of 22 OECD countries studied, hardly changed in three, and fell in
only two (Turkey and Greece). Of the 23, only Mexico had a higher GINI than the US, and it is
classified by the World Bank as a developing country, where income distributions overall tend to
be less equal. A second measure is changes in median compared to average income; the former
takes into account concentrations of income at the extremes. Between 1979 and 2007, average
real household income in the US grew by 58%, while median incomes increased by only some
19%. This is seen as a clear sign of growing income concentration income in the US, at both
higher and lower extremes of the income range.
In the US, incomes have been growing at the top of the economic ladder. The income
share of the top one percent doubled between the 1970s and 2012. In 2010, the top one percent of
tax filers earned 20% of the US market income, and the top 0.5% earned 5%. This was the
highest level of income concentration at the top in the US since 1928. In contrast, since 1970,
there has been almost no increase in average incomes among the bottom 90%. As a result, the
Brookings study concluded that income disparities in the US are more “polarized” than in any
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other economically advanced country. Nor is the US a model anymore for upward mobility
across generations, as it has been in times past; the income of parents in the US “is relatively
more predictive of incomes” for their children among all of the advanced economies (Dadush et
al. 2012, 23).
This growing inequality has been one focal point of current political debate and was most
visibly the rallying issue of the Occupy Wall Street social protest movement that began in New
York City in 2011. Protesters in the subsequently global Occupy movement objected to the
disproportionate share of income held by the richest 1% of the population, contrasting them with
the remaining 99% of the population (“Income inequality in America” 2011). At the start of
2015, Democrats in the US Senate proposed legislation to combat inequality by providing a
sizable ‘bonus tax credit’ to middle and low income earners, which would be funded by a fee on
financial transactions and tax increases on the top 1% of earners (Montgomery & Kane 2015).
Inequality is more than a fairness issue; it has real-world consequences. In The Spirit
Level, Richard Wilkinson and Kate Pickett (2009) bring together the findings of quantitative,
peer-reviewed studies on the effects of income inequality on ten social problems. The ten
problems were low social trust, mental illness, life expectancy, infant mortality, obesity, child
educational performance, teenage births, homicides, imprisonment rates, and low social mobility.
For each, they found, with a high level of statistical confidence, that “there is a very strong
tendency for ill-health and social problems to occur less frequently in the more equal countries.”
(19-20) The extent of these problems was not related to average income but to the distribution of
earnings in a society. They found the same strong correlation of income inequality to social
problems among states in the US. They conclude: “The problems in rich countries are not caused
by the society not being rich enough (or even too rich) but by the scale of material differences
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between people within each society being too big” (25). Beyond some income, what matters are
not absolute earnings but “where we stand in relation to others in our own society” (25).
The explanations for these findings turn on the interactions among individuals and the
larger society, specifically in responses to stress induced by threats to status and self-esteem.
Low social status is one of three major factors known to affect or reflect “the extent to which we
do or do not feel at ease and self-confident with each other” (39). Greater inequality, they
determine, appears to increase the importance of social status and heighten anxieties about social
status. Two consequences are especially worth noting for our purposes: inequality (1) increases
status competition and status anxiety and (2) weakens community life and reduces trust. The first
is discussed below as an economic and the second as a political factor affecting greener growth.
The correlation between income inequality in society and prevalence of social problems
is striking. Because it is easily one of the most unequal among the wealthy nations, the US has
some of the highest incidences of the social problems examined in The Spirit Level. Teenage
birth rates in the US are more than four times the EU average and ten times those of Japan;
obesity rates are second highest in the world (surpassed recently by Mexico); US educational
performance is a constant source of national self-analysis; imprisonment rates in the less equal
US states are far higher than those in the more equal states; and the list goes on. In an index of
social and health problems, despite high average incomes the US ranked last among twenty-one
countries studied. In a study by the National Research Council and Institute of Medicine, the US
was found to have consistently higher mortality rates and more inferior health than 16 peer high-
income countries over the past two decades (Woolf & Aron 2013). Even though these issues may
not directly bear on the capacity for ecological success, they do reinforce the inequality that, as
we argue below, undermines that capacity in the future.
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Why Inequality Matters for Environmental Performance: The Theoretical Case
The relationships among economic and environmental performance and objectives are
complex. For the most part, the assumption has been that growth is bad for the environment and,
conversely, that actions taken to protect or restore the environment harm the economy. A third
school of thought has arisen recently, captured in the concepts of sustainable development and
the green economy. It asserts that economic and environmental objectives may be pursued in
ways that are mutually beneficial, even synergistic, through appropriate policies and investments.
For the most part, in the debates and analysis over growth and the environment, the issue
has been the scale and rate of growth. How do higher Gross Domestic Product (GDP) and Per
Capita Income (PCI) affect the ability to deliver better environmental policies and performance?
Is it possible to raise incomes without having to bear the negative effects of pollution, loss of
habitat and biodiversity, climate change, water shortages, and other problems? Historically, one
school of thought argues that there are “limits to growth” imposed by the biophysical capacities
of the planet and of global, regional, and local ecosystems (Daly 1991). Even with dramatic
gains in eco-efficiency through a decoupling of growth from environmental harm, the sheer scale
of global growth will undermine the ecological resources on which well-being depends. On the
other side is the argument that growth is necessary, that limits may not exist or can be overcome,
and that wealth creates the scientific and economic capacity for solving environmental problems.
Much of this debate takes place in the context of the so-called Environmental Kuznets
Curve (EKC) research that examines relationships among income and aspects of environmental
policies or performance. The EKC is based on the inverted U-shaped curve that Simon Kuznets
used to explain how inequality in a country increases with its income, and then decreases after
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hitting a turning point (Kuznets 1955). The EKC posits that environmental degradation increases
with income, and then decreases as a country gets richer—and starts to demand higher
environmental quality. There is an extensive EKC literature (examples are Grossman and
Krueger 1995; Esty and Porter 2005; Harbaugh et al. 2002; Stern 2004). In general, it is fair to
say that some forms of air and water pollution, particularly those with health and other
consequences, appear to rise in the early stages of growth and at some point decline absolutely.
For other forms of environmental harm, such as forest or greenhouse gas emissions, this pattern
does not hold nearly as well.
There has been far less attention to the distribution of wealth and income. Is equitable
growth more consistent with environmental policy success than the alternative? Do higher levels
of inequality create conditions leading to more unsustainable consumption? Does inequality lead
to social distance, less trust, and reduced capacities for achieving consensus on environmental
issues?
We attempt to answer these questions in this and the following section of the paper. This
section proposes four theoretical explanations for why inequality could affect environmental
performance. It also draws upon general research relating to each of these explanations. The next
section of the paper reviews the environmental policy research on this topic. Our objective is to
define the arguments, review the available evidence, and set out issues and needs for research.
The theoretical case may be summarized in four assertions, all with a basis in research.
Inequality may undermine societal capacities for environmental policy success by:
Encouraging a culture of consumption. Gaps between income groups and concentrations
of income at high levels increase the likelihood of positional competition, in which goods
are valued for being status-conferring and novel rather than for their practical utility.
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Enabling the wealthy to live well beyond what is needed for a comfortable and rewarding
existence. High consumption societies and groups consume a disproportionate share of
the national and global ecological footprint, in addition to increasing status competition.
Eroding the sense of community and chipping away at social capital. If inequality
increases social distance and undermines social capital, it becomes difficult to engage in
collective action on which high levels of environmental protection depend.
Reducing the value of and willingness to provide public goods. Environmental protection
is mostly a public good, as are public education, social safety nets, community health,
and much of a society’s physical infrastructure. High income concentrations and the
resulting power imbalances may affect the willingness to provide public relative to
private goods.
The first two assertions relate to economic effects and behavior, the others to political and
social variables. We consider the foundations and general validity of each of them before
reviewing the evidence from the environmental policy research literature on inequality.
A Culture of Consumption
The argument here is that inequality encourages the excessive consumption that fuels
environmental degradation. This has been a central theme in the limits to growth literature.
Major factors behind this culture of consumption, critics of growth argue, are the two phenomena
of status competition and positional goods. The first means that we define our needs based on the
comparisons of those around us with whom we identify. The second describes goods whose
value is determined not by their actual contribution to well-being but by the status they confer,
such as luxury cars, elite universities, homes in the right neighborhoods, trendy clothing labels, a
prestige golf club, and many other such goods. The essence of the argument is that economic
inequality leads to behaviors that promote consumption beyond ecologically desirable levels.
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Tim Jackson emphasizes the effects of these phenomena in Prosperity without Growth.
Affluence, he argues, leads to a demand for goods valued not for their tangible effects on the
quality of life but as indicators of social position and economic status. “What matters—more
than the absolute level of income—is having more or less than those around us” (52). In what he
calls the “iron cage of consumerism,” people consume in a constant effort to maintain their status
relative to peers and to enjoy the novelty that comes from new, fashionable, or trendy goods.
“Novelty has become a conscript to the drive for economic expansion.” Even further, he argues
that “Material goods offer the ability to facilitate our participation in the life of society” (98).
The relatively new field of happiness research sheds light on the effects of inequality on
perceived well-being. In The Pursuit of Happiness, Carol Graham (2011) notes that, given a
choice, most people would rather live in the higher end of the income range in a society than in
the middle or lower end of the income range, even if their actual earnings are lower. Why?
Because they measure their status and well-being in comparison to those around them. Their
perceived well-being is thus based, to a large degree, on their status in their community.
A second implication of happiness research, and one that goes directly to the effects of
inequality on future prospects, relates to the prospects in a society of upward mobility. When
people perceive that they have the ability to move up economically, they “are much more likely
to invest in their own and their children’s future” than those with lower such prospects (43). A
lack of perceived economic mobility depresses people’s willingness to invest in the future,
through education, job training, savings toward log-term goals (such as owning a business), and
so on. In economic terms, those having less social mobility have a higher discount rate: they tend
to discount future benefits in favor of near-term objectives and behaviors. This is further
evidence of the psychological effects that high levels of economic inequality have in a society.
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The findings of the wide range of research drawn upon in The Spirit Level (2009)
reinforce the effects that positional goods and status competition have in increasing demands for
goods and services that in turn increase ecological stress. These factors create and sustain the
culture of consumption that may explain much of the substantial ecological footprint from high-
consumption societies, a culture which critics have claimed is particularly pronounced in the US.
The question to ask is: How important is consumerism fueled by status competition and
positional goods in promoting environmental degradation? That is, would societies with roughly
equal per capita incomes differ in terms of their ecologically harmful consumption on the basis
of their relative levels of economic inequality? This takes us to the issue of ecological footprint.
The Ecological Footprint
The old assumption for many years was that economic growth and prosperity lead in an
almost linear fashion to more pollution and other forms of environmental degradation. A great
deal of research and experience suggests that this relationship is far more complicated than was
once thought (Cole, Rayner, and Bates 1997; Dasgupta, at al. 2005). For some forms of
observable, especially health-related pollution, pollution levels increase in the early stages of
growth and then, at moderate income levels, begin to decline absolutely. This is not because of
some magical effect of growth, but due to growing demands for action and better capacities for
responding to evidence of the effects of pollution. Higher incomes also lead to other outcomes
that offset the ecological stress of growth itself, such as sharply declining rates of population
growth, improved social and economic status of women, expanding educational opportunities,
and better capacities for governance, among others. There is also evidence that growth promotes
the emergence of democratic regimes (Przeworski, et al. 2000) and that democracies, in turn,
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perform better environmentally (Barrett & Graddy 2000; Li and Reuveny 2006; Dasgupta, et al.
2006).
Still, there is no doubt that growth and affluence increase biophysical pressures on the
planet. Affluent societies use more energy (almost entirely fossil fuels), water, and materials;
consume more land through sprawl and unplanned development; consume goods and services at
higher levels; and create stresses on sensitive, critical ecosystems. Although at best a rough
measure, the ecological footprint method compares high relative to low income country stresses
on the environment. In its terms, more affluent countries from the Organization for Economic
Cooperation and Development (OECD) extract a far greater toll on planetary sources, sinks, and
services than to poorer ones (Moran, et al. 2008). We know that, for many indicators, higher
average incomes lead to a larger ecological footprint. The question here is: Do income or wealth
distributions have effects that are independent of the average income levels?
The discussion of positional goods and status consumption at least suggests links between
economic inequality and ecological harm, independent of income. The logic is that real and
perceived differences in economic status in unequal societies fuel greater and more harmful
consumption. As measured by the GINI, for example, a more equal society like Sweden would
be expected to engage in less ecologically harmful patterns of consumption than the US or UK.
People higher in the income scale presumably will consume more and create pressures to
consume among middle and low income groups striving to maintain their position in society.
Inequality creates an upward pull on consumption that is less pronounced when there is less
income variation. In this sense, a high GINI would be correlated with less environmental quality.
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Of course, some forms of consumption are less environmentally damaging, or are more
environmentally beneficial, than others. One interesting set of conclusions regarding the effects
of economic inequality is an analysis regarding consumption of green products by “pioneer”
consumers, which concludes that “excessive inequality harms the development of environmental
technologies especially in rich countries” (Vona & Patriarca 2011, 2201). Green consumers
generate positive social externalities by purchasing products that are environmentally preferable
to conventional ones (e.g. hybrid and electric cars). The environmental paradox of wealth is that
“while rich and more educated households consume more and hence have a worse impact on the
environment, they also tend to buy more environmentally-friendly innovative products” (2202).
In their demand-driven analysis, they conclude that, in richer countries, “a negative relationship
emerges between inequality, on the one hand, and both environmental innovations and the size of
eco-industries, on the other” (2210). In poor countries, they find that per capita income, not its
distribution was more important. In sum, the “externalities generated by pioneer consumers of
green products benefit the entire population only for relatively low income distances” (2201).
The Capacity for Collective Action
A frequent complaint about environmental programs is that they expand government’s
role in society at the expense of such values as individual freedom, property rights, and freely-
functioning markets. Stated in these terms, this is not an unreasonable complaint. In the standard
economics formulation, pollution is an externality that markets do not take into account. The
tragedy of the commons, in which each person’s pursuit of self-interest leads to the ruination of
all, requires what Hardin termed “mutual coercion, mutually agreed upon” (Hardin 1968, 1247).
Ecological protection nearly always demands some form of collective action in a society. In most
cases, at least on a large scale, it has required government to step in and correct such failures. In
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others, as shown in the research of Elinor Ostrom and colleagues has shown, communities have
been able to organize to protect their common pool resources through various institutional
arrangements.
Many factors may influence the capacity for collective action in pursuit of shared goals.
Those with positive effects include trust and confidence in government; high reservoirs of social
capital; general acceptance of government’s role in the economy and society; and relatively high
levels of social and political consensus on major policy goals. It is not much of a stretch to say
that these conditions are more prevalent in Sweden, Norway, or the Netherlands than in the US, a
factor that may help in explaining differences in their capacity for strong environmental policies.
One issue worth exploring with respect to inequality and environmental performance is
the role of societal trust. Research by Uslaner (2002) and others suggests that high levels of
inequality in a society reduce moral trust, which influences the capacity for collective action.
Unlike strategic trust, which is based on experience, attitudes toward strangers are based on
moral trust, “the belief that others share your fundamental moral values and therefore should be
treated as you would wish to be treated by them” (Uslaner 2002, 18). This moral trust is based on
optimism, with positive expectations about and a sense of control over the future. Levels of
moral trust are a product of family background, parental attitudes, and collective experiences.
High-trust societies are more tolerant, less xenophobic, stronger on women’s rights, and are more
likely to support shared public goods like environmental quality over more particular interests.
They also are more likely to support fair distributions of wealth and more efficient, responsive,
and uncorrupt government (Uslaner 2002, 218, 242). The research strongly suggests that low
trust affects the ability to act on collective action problems like the environment.
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Based on an analysis of a range of survey data and the social science literature on societal
trust, Uslaner (162) concludes that collectively the level of trust in a society depends on how
economic goods are distributed.” He also finds that income levels have no effect independent of
income distributions. “What matters,” he finds, “is not how rich a country is, but how equitable
is the dispersion of income” (181). Other explanations, such as ethnic homogeneity or attitudes
toward government, are secondary to the explanatory power of economic inequality (240).
In discussing why inequality matters in the US, Joseph Stiglitz gives a great deal of
attention to the consequences of “an enormous erosion of trust in recent years” in the US (2012,
123). It is well-established in the research that low levels of trust and social capital generally
harm the economy, but this “may even have more invidious effects on the functioning of our
democracy” (126). Collective action in society depends on compromise, which depends on trust;
the “breaking of the social bonds and trust…will inevitably, have broader social consequences”
(125).
The Willingness to Provide Public Goods
Closely related to this capacity for collective action are the effects of inequality on the
value attached to public goods. Like defense, most ecological quality represents a public good.
These concepts of public and private goods matter not just as theoretical constructs. They have
profound, real-world consequences. When income is highly concentrated at the top of the scale,
and political power along with it, a society is probably going to be less willing to provide public
goods. Put simply, wealthy people do not need public schools, community health centers, or state
universities, and they can escape from many forms of pollution that affect the poor. Moreover,
the public goods that are provided in highly unequal societies may not be high in quality. Along
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with and closely related to the capacity for collective action, we could speculate that the higher
the ratio between the incomes and wealth of the top to the bottom quintiles in society, the less the
willingness to provide public goods. Those at the top have less of a need for public goods. Since
influence over policies that deliver public goods depend on the political power of those on top,
public goods will be less available and of less quality in unequal societies.
In the US, opposition to environmental programs is only one way in which conservatives
express a preference against public and for private goods. Others are: advocating private schools
and vouchers over investment in public schools; privatizing public services through contracting;
opposing government provision of health insurance and services; refusing to act upon threats to
common pool resources (e.g. climate change or ecosystem loss); objections to funding social
safety nets like food assistance or unemployment benefits; pushing for lower marginal income
rates and differential rates for capital gains; and opposing funding for public infrastructure.
As Judith Layzer (2012) establishes in her analysis of political conservatives’ role in
American environmental policy, opposition to environmental goals is only one of many ways in
which public goods are under attack. Moreover, the hostility to delivering public goods such as
cleaner air and water or protected wilderness reflected more than advocacy on behalf of political
interests, although it surely has been that, but also “the two transcendent and unifying values” of
“freedom of individuals from government interference and economic inefficiency, assumed to
result from markets unfettered by government regulation” (2). These values influence political
debates on health care, housing, and education, as well as on the environment. The only policy
arena where conservatives consistently support a high level of public goods is national defense.
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Whether or not one shares these preferences for private over public goods is not the issue
here. Although one may argue that that the US has gone too far in devaluing investments in a
range of public goods, there is plenty of room to debate such issues. What matters for now are
the consequences of an unwillingness to provide public goods and the role that inequality plays.
Findings from the Environmental Policy Research
The assertions above include social, economic, and political explanations for the effects
of inequality on environmental performance and outcomes. Does higher income inequality
influence behavior in ways that increase pressures for higher growth, such as through the effects
of status competition and positional goods? Does higher inequality increase or reduce overall
levels of consumption? Does economic and/or political inequality skew power distributions in
ways that increase environmental degradation or reduce the capacity for managing it? Does
inequality undermine the value attached to public goods and thus undermine collective action?
These questions have not been a priority of the research on explaining environmental
performance. What research does exist offers mixed answers, with more clarity on some than
others. There is reasonably clear evidence of the effects of status competition and positional
goods. Higher levels of inequality in income and wealth do appear to create pressures for more
consumption. People value some goods for the status they confer and as signs of being able to
participate fully in society, at least those elements of society with which they identify. If the
conclusions of the range of research cited in The Spirit Level are valid, and there are good
reasons to assume they are, heightened “social evaluation anxieties” produced by inequality will
have the effect of increasing overall consumption levels in a society. Whether or not increased
consumption directly increases ecological pressures is another question. It is fair to conclude,
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however, that such factors fuel the demand for higher rates of economic growth that leads to
more energy use, consumption, and ecosystem stress.
There is somewhat more clarity on at least one aspect of the political side of the picture.
The weight of evidence suggests that economic inequality affects the value attached to public
goods. It also reduces the capacity for reaching consensus on major goals and acting collectively
to achieve them. Although the positive effects of greater social capital for collective problem-
solving has been shown to be influential in producing other kinds of social outcomes, findings in
the environmental arena are less clear, although this has been the subject of limited study at a
macro-level. At a micro-level, in locally managed common pool resources and problem-solving,
there is evidence that more equality and the resulting higher social capital have beneficial effects.
Taking these conclusions as a starting point, the economics studies set out to determine
why some affluent societies exhibit better environmental performance than others. Why do
countries such as Sweden, Finland, or Norway do better than other countries in performance
rankings than others, such as the US? Of course, a variety of institutional, geographic, and other
explanations are worth considering. The objective in this line of research considered here,
however, is to isolate effects of income inequality on environmental performance. In contrast,
most of the empirical research on explaining performance has focused on growth and incomes.
Elisabetta Magnani (2000) examines how inequality affects environmental expenditures
in affluent countries, beyond effects of higher income. Her results “point to a positive absolute
income effect and a negative impact of income inequality on environmental protection” (432).
With spending as the dependent variable, it is not surprising that absolute incomes matter. Richer
societies are more willing and able to commit resources to the environment. What also matters,
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however, is the relative income effect, which offsets the positive effects of growth by shifting
voter preferences away from environmental quality. “In high income countries, agents’ relative
incomes affect preferences over private goods and public goods,” such as the environment (441).
A later study builds upon this research but relies on a more dynamic model that accounts
for the effects of a growing economy. Kempf and Rossignol (2007) focus on the ways in which
income distributions affect opinions on the perceived trade-offs between economic growth and
environmental protection. They find that the “more unequal a society…the more resources will
be used to sustain growth despite its negative impact on the state of the environment” (54).
Further, “the poorer the median voter, relative to the average agent in the economy, the more
deteriorated the environment will be, sacrificed to more physical production” (54). Another
theoretical analysis (Eriksson and Persson 2003) brings democracy into the equation. The links
between inequality and pollution reduction depends on the degree of democracy: “In a complete
democracy a more equal income distribution generates, ceteris paribus, less pollution, whereas
the opposite is the case if democracy is highly restricted” (13-14). A modification to democracy
Studies discussed earlier may be that democracy can deliver better environmental quality, but
these effects are diminished, as are those of overall growth, under conditions of high inequality.
Inequality has been found to be a factor in biodiversity loss. This has been established
clearly at the micro level in the research on local management of common pool resources, in the
work of Elinor Ostrom and others. More equal relationships determine both the social capacity
and the economic conditions in which the collaboration needed to manage resources occurs. This
research “shows that inequality can thwart the collective action required for environmental
protection” (Holland, et al. 2009, 1305). At a larger, national scale, Holland et al. found that,
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although the proportion of threatened species increased with higher GDP, inequality as measured
by the GINI had a significant positive coefficient in all models in which it was included and had
a stronger independent effect on the proportion of threatened species than GDP per capita (1312).
The explanation may be found in a combination of individual behavior and the capacity for
collective action. Under conditions of high economic inequality, the wealthy may insulate
themselves from environmental degradation and, more importantly for our purposes, make
agreement on and action on behalf of common goals less likely. Reinforcing these conclusions is
a study finding that “states with higher socioeconomic inequity tend to have a greater proportion
of species undergoing population decline” (Holland et al. 2009, 1306; from Mikkelson et al.
2007).
The most consistent findings about the effects of political inequality on the environment
come from James Boyce. In a first, theoretical paper, he explains environmental degradation as
due to the ability of winners from economic activity to impose costs on losers. In consequence,
he concludes “greater inequalities of power and wealth lead, all else equal, to more
environmental degradation” (1994, 169). Inequality enables winners to impose their will on
losers.
That the winners (those with power) in any policy arena are able to impose their will on
the losers (those lacking power) is an elementary rule of politics and is hardly unique to the
environment. That more inequality enhances the winners-losers imbalance is not surprising.
Boyce’s contribution is the reasons why power inequity leads to environmental degradation:
greater inequalities of power and wealth lead to more environmental degradation for three
reasons: (a) The excess environmental degradation driven by powerful winners is not
offset by the environmental degradation prevented by powerful losers; (b) inequality
raises the valuation of benefits reaped by rich and powerful winners relative to costs
20
imposed on poor and less powerful losers; and (c) inequality raises the rate of time
preference applied to environmental resources by both the poor and the rich, by
increasing their poverty and political insecurity, respectively. (178)
If supported empirically, he concludes, these arguments “imply that democracy and equity are
important not only as ends in themselves, but also as means to environmental protection” (178).
One theoretical critique to this argument comes from Lyle Scruggs, who points out that if
environmental quality is a normal economic good, demand for it will increase with income and if
it is a superior economic good, demand will increase even faster with income (1998). Drawing
from studies that show environmental behavior and demands being positively associated with
income and arguing that the wealthy cannot avoid all environmental harms, Scruggs concludes
that inequality and environmental quality are not linked as strongly as income and environmental
quality.
The assertions about inequality and environmental quality were tested, at least partially,
later by Boyce and coauthors (1999). In line with the earlier analysis, they hypothesize that
“those agents with more power are able to impose higher external costs on those with less
power…” as well as that “higher per capita income leads to less power inequality” (128). These
are tested in the context of American states and use four variables for measuring the distribution
of political power: voter participation; tax fairness; Medicaid accessibility; and educational
attainment. Higher values in each are associated with having more political equality. In these
terms, Minnesota has the most equitable distribution of political power and Mississippi the least.
Not surprisingly, income inequality and minority populations were linked with higher levels of
political inequality. More equal distributions of power are related to stronger environmental
policies and with better health outcomes in a state. Among the policy options coming out of this
21
study are calls for more targeted environmental enforcement to offset the effects of inequality
and more participation, public disclosure, and accountability as means not only of restoring
power distributions but improving the environment.
What role does social capital play in influencing environmental performance? One study
found positive relationships (Dulal et al. 2011). It used social capital to refer “not just to the
degree of trust, cooperation or networks, but the degree of social inclusiveness” (122). Recall the
theory of social capital: that trust, cooperation, and networks improve the capacity for collective
action. Expanding upon a previous study that reached mixed conclusions (Grafton and Knowles,
2004), this one drew from data in the World Values Survey to examine the effects of five clusters
of independent variables: gender equity, intergroup cohesion, interpersonal trust, involvement in
clubs and associations, and civic activism. Country rankings in the Environmental Performance
Index were the dependent variable. Their most consistent result is that “gender inclusiveness is
associated with cross-country differences in environmental performance” (136). When women
play actives role in society and politics, both health and ecological outcomes are better. In
contrast, interpersonal trust has a positive effect on environmental health indicators but no
statistically significant relationship with ecological indicators. Clubs and associations were
negative for both categories, and the other explanations showed no relationship either way. As a
side note, they found that democratic countries do better and densely populated ones do worse.
What Lessons Should Be Drawn from the Research?
This research is hardly definitive in documenting clear linkages between economic or
political inequality and environmental quality. It even offers contrasting explanations at times for
the form these linkages might take. The political view suggests that poor and minority groups are
22
made to bear the costs of economic activity while the more powerful and prosperous enjoy the
benefits. That view certainly is supported by the environmental justice literature in the US, which
documents the many ways in which poor minorities bear more than their share of harm. On the
other hand, some of the research suggests that, because they attach more value to the immediate
needs for jobs and economic security than longer-term environmental quality, lower-income
groups will show a preference politically for policies that support growth over environment.
When low-income, minority groups have mobilized to assert environmental values, as occurs in
the environmental justice movement, it has been to assert health and not ecological objectives.
The field of happiness research does provide some support for the existence of differing
time perspectives among higher and lower-income groups, especially in relation to perceived
social mobility. People with higher prospects of upward mobility “are much more likely to invest
in their own and their children’s future” while those with lower prospects have lower discount
rates and invest less (Graham, 2011, 43) Given the findings about social mobility in the US, this
is something that should be taken into account when considering the effects of inequality.
Contrasting explanations also exist with respect to wealthy income groups. To the extent
that affluent groups can insulate themselves from adverse effects of environmental degradation,
they might be expected to prefer private goods they can afford through consumption over public
goods like environmental quality. Indeed, the differences between Boyce and Scruggs discussed
above turn exactly on this point. It is true that among the wealthy, preferring private over public
goods makes more sense in education, health care, or security than in the environment. Private
schools, elite universities, premium or “concierge” medical care, and exclusive neighborhoods
supplemented by private security are easier to obtain than is insulation from environmental harm.
23
Yet the wealthy may protect themselves from much of such harm, as the environmental justice
research demonstrates, so there still is some validity to the argument.
The political factors seem to be a more powerful explanation for how inequality might
affect the capacity to avoid many forms of environmental degradation. They overlap with the
economic factors discussed above. Having the social capital and other political capacities needed
to agree on long-term goals and achieve them is a condition for effective governance. This
conclusion is amply documented in the political science literature by such scholars as Putnam,
Ostrom, and Uslaner. There is a strong theoretical basis, and some empirical evidence, that social
capital and other elements of the capacity for collective action should be a condition for adopting
and promoting the environmental policy agenda. To the extent that economic and political
inequality create social distance, undermine common purpose, erode social capital, and make
collective action more difficult and costly, it may pose barriers to a green economic transition.
Inequality and Its Consequences for the Environment
In summary, there are several reasons for giving attention to high inequality. A simple one
is that it is the right thing to do. High levels of inequality mean that some people live under
conditions of hardship while others live in luxury. If the lowest income groups in society exist
below minimal levels of physical and social well-being, there is an even stronger ethical case.
A second reason is that less inequality produces a healthier economy, which benefits all
parts of society. This is the thesis of liberal economists like Robert Reich (2013). Low-earning
groups spend a higher proportion of incomes on goods and services and stimulate economic
growth; less inequality and growth thus form a kind of virtuous circle, in which everyone is
better off. This directly counters that conservative argument, by now thoroughly discredited, that
24
low marginal tax rates stimulate growth that increases tax revenues. The counter argument is that
we should not be taking action to stimulate growth, because growth is the source of the problem
(e.g. Cato 2009). Still, advocates of slow, no, and de-growth agendas should realize that their
proposals actually may hurt the people they want to help, at least given current political and
economic conditions. Lower and middle income groups suffered most from the recent recession.
Until the underlying causes of inequality in the US and other nations are addressed, de-growth as
a policy prescription is fundamentally unfair as well as politically unrealistic.
A third reason to advocate reduced inequality is that it creates a happier citizenry. Here,
several sources of evidence come into play. As recounted in The Spirit Level, a range of social
problems are more common in more unequal societies. People are not unaware of their economic
and social status relative to others. This leads to behaviors that not only increase social problems
but also undermine the ability to deal with them. The happiness research confirms that it is the
sense of relative deprivation that affects people’s sense of well-being. Societies like Denmark,
Sweden, and Norway, which have less economic inequality, consistently rank high in perceived
well-being. Their citizens feel less pressure to maintain a certain standard of living, enjoy a range
of social benefits that provide a sense of security and well-being, and experience greater social
capital.
A fourth reason to favor reduced inequality is that it increases the capacity in a society to
act collectivity in pursuit of common interests and increases the value attached to public goods.
Many factors affect the capacities for collective action. Some may be institutional, such as
differences in legislative representation or electoral rules. Others relate to historical, cultural, or
demographic factors. Research by Robert Putnam, for example, suggests that the ability to reach
consensus on major issues and to establish policies that act on that consensus are better in less
25
diverse societies. This does not mean that greater diversity necessarily makes collective action
more difficult, he concludes, but that different paths to creating and enhancing social capital will
need to be found. One path, as considered here, is acting to reduce economic inequality.
What are the implications for environmental performance? Evidence on positional goods
and status competition suggests that high inequality fuels excessive consumption that, other
things being equal, increases ecological pressures, including climate change. Of course, many
policies are available to influence consumption—skillful use of the tax system and government
purchasing being two of them—but reducing inequality is another means. Similarly, if inequities
in income and wealth increase overall ecological pressures, a point deserving more study, lower
standard deviations in such distributions could provide a basis for better environmental policy.
What may prove to be even more important in the long run are the social and political
consequences of inequality. It is more than arguable that the more equal societies do many things
better than less equitable ones. If they are better in arriving at what Robert Durant (2004) terms
“a sense of shared purpose,” experience fewer social problems that reinforce inequality and
undermine the capacity for collective action, and empower the potential losers in a sustainability
transition more than the winners, the results may be promising for environmental performance.
Before moving to the implications for public administration, we offer the following
summary of the discussion:
The critical growth literature focuses too much on growth per se and not enough on the
equitable distribution of that growth, income, and wealth in affluent societies. This is not
to say that growth is inherently good or that growth critics have not appreciated the gross
inequities in poor relative to wealthy countries. It is fair to say, however, that economic
and political inequality within relatively more affluent countries does have consequences.
26
A capacity for environmental policy success depends on more than environmental
policies and institutions. A case can be made that inequality-reducing measures like a
guaranteed income, family-supporting minimum wage, less regressive tax policies, and
improved universal health care and public education are as necessary to a green transition
as are changes in environmental policy and institutions.
There may be a virtuous circle: reduced inequity not only increases environmental policy
capacities but also improves the quality of life and health status of low-income groups
that in turn enhances social capital and the capacities for collective action. In sum, the
social agenda for sustainability may have an empirical as well as normative foundation.
Implications for Public Administration
The theoretical and social arguments detailed above give a sense of the problems
inequality presents for society and environmental performance writ large, the broad implications
of which include economic harm, an unhappy and divided citizenry, and lower value for public
goods, including environmental amenities. There are several more specific implications for those
studying and practicing public administration, which deserve special attention here. As discussed
above, the value placed on public goods decreases as inequality increases, which decreases
political support for the actions of public agencies. This is especially true for environmental
agencies that impose economic costs on private firms in order to ensure the public good of
environmental quality. With decreased political support, resources may be diverted from these
agencies and those in their network of environmental quality provision.
Speaking of networks, the new model for a growing proportion of governance is also
threatened by inequality. In the US and many other democracies, there has been a transition
toward what H. Brinton Milward and Keith Provan (2000) have termed the ‘hollow state.’ In the
hollow state, the public sector relies on a network of third parties, tied together through formal
and informal means, to deliver public services. Much has been written on the effectiveness of
27
these networks (e.g., Provan & Milward, 1995; Head, 2008), but as of yet insufficient attention
has been paid to the threat to their efficacy given the erosion in trust associated with increasing
inequality. In low-trust societies, the ability to form networks of service provision will be more
difficult, and the ability of network managers in the public sector to exert control and ensure
accountability of the members of their networks is also undermined. Additionally, the erosion in
trust between providers of public goods and their clients undermines the efficacy of the network,
especially in the more antagonistic relationships such as between environmental regulators and
those they regulate. With such a trust gap, there may be more shirking and noncompliance and
less communication and cooperation that would undermine regulatory effectiveness.
Another implication of growing inequality is the need to provide goods for all groups in
the face of the increasingly empowered wealthy and the disempowered poor. As environmental
justice has shown, the disempowered segments of society are disproportionately saddled with
environmental ills, in part because of their status and lack of a voice in policy making. Growing
inequality will only exacerbate this issue by reinforcing existing power distributions. As we have
seen in the patterns of inequality in the US, however, the wealthy are a small minority of the
population who neither represent the whole population nor deserve disproportionate influence
over public goods like environmental quality. As their voice grows ever louder in political and
administrative processes, ensuring fair provision of public goods for all groups will become even
more challenging.
With these significant implications for public administration and society, we see a clear
and pressing need to address the growing trend of inequality in the United States and other
countries. This trend is not the innocent product of economic growth; it is the logical conclusion
of disjointed economic growth and policies that erode provision of public goods. This trend is
28
also severely detrimental, as we have argued in this paper, for our economy, our health, our
quality of life, and our environment. Just as an ecosystem suffers when its natural balance is
upset, so too does our society suffer from the unbalancing and divisive effects of inequality.
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