Regulatory Federalism and Environmental Protection in the United States

In this paper we address two aspects of regulatory federalism in U.S. environmental policy. First, we suggest that environmental quality in U.S. states responds positively to increases in income. Second, we provide evidence that environmental quality did not decline when President Reagan's policy of new federalism returned responsibility for many environmental regulations to the states. Thus, state environmental quality appears to reflect more than just the dictates of federal policy. Additionally, we find that a “race to the bottom” in environmental quality did not materialize in the 1980s.