The Korean Economic Review
Lobbies Competition and Bilateral International Environmental Agreements
Geum Soo Kim (Hoseo University)Year 2013Vol. 29No. 1
This paper analyzes two small open economies that share a natural environment andconsider an environmental agreement between them. The two governments do not merelymaximize general welfare in their respective countries, but also pick a policy partially inresponse to their internal “functionally specialized” industrial and environmental lobbies.This paper provides the conditions under which an International Environmental Agreement(IEA) between those two countries could be achieved in a subgame-perfect equilibriumwith or without special interests’ pressures.