A political economy model of the Ganges pollution cleanup problem

We study pollution cleanup in the Ganges in Varanasi, India. Voters elect politicians and elected politicians decide how much pollution to clean up. Between the two time periods, there is an election. Politicians are sincere or insincere. The marginal cost of public funds zeta measures how efficiently elected politicians transform tax receipts into pollution cleanup. Voters have identical per period utility functions. We ascertain the equilibrium outcome and per period voter welfare. Second, we show that an increase in zeta reduces the equilibrium pollution cleanup and voter welfare. Third, an insincere politician can delay the revelation of his insincerity. We show that a critical value of zeta,zeta x204e;,exists such that the insincere incumbent separates and loses the election if and only if zeta>zeta x204e;and that he pools and is re-elected otherwise. Finally, we note that an increase in zeta can raise voter welfare when politicians are more likely to be insincere. Recommendations for Resource Managers Successful cleanup policies depend on whether elected politicians are sincere or insincere about pollution cleanup. When cleanup is publically financed, the marginal cost of public funds greatly influences how much pollution is cleaned up. In some circumstances, an insincere politician can get elected and do very little to clean up pollution.