Assessing the empirical impact of environmental federalism

Many theoretical models analyze the effects of decentralized environmental policymaking. The predictions range from a race to the top, a race to the bottom, or no effect. However, little empirical evidence exists to resolve this ambiguity. This paper fills the void by examining the impact of decentralized environmental policymaking in the U.S. under Presidents Ronald Reagan and George H.W. Bush. For abatement expenditures, Reagan's decentralization had no discernible impact before the mid-1980s, but by the mid-1980s the data are consistent with decentralization leading to a race to the top. No statistically significant effect is found on nitrogen oxide or sulfur dioxide emissions.