The international journal of public finance, Public Sector Economics, edited by the Institute of Public Finance, has recently published a new number, directed by Yamini Aiyar (Centre for Policy Research),  Rolf Alter (Hertie School), and Linda Bilmes (Kennedy School of Government). This new issue includes “Going global, locally? Decentralized environmental expenditure and air quality”, written by Sean Dougherty (OECD- Fiscal Network) and Andoni Montes, Ituna researcher and Professor at the Public Policy Department of UPV/EHU.

The paper focuses on the role of public finance decentralisation on achieving more liveable cities, and in particular better air quality, which is one of the main objectives set by United Nations´ Sustainable Development Goals (SDGs).

According to recent survey data, most subnational governments participate in #SDG implementation, especially to achieve #environmental goals. Moreover, the public health concerns of COVID 19 have helped to motivate even more #cities to improve local air quality. However, despite the importance of intergovernmental cooperation for the success of the SDGs, there is still limited progress at the #regional and #local levels, due to limited institutional capacity and doubts about electoral consequences of unevenly distributed costs.

By using panel data for 2010-2019, covering 217 OECD – OCDE metropolitan areas, the authors of this research find that subnational public spending on environmental protection is more strongly associated with better municipal air quality than environmental expenditure by general governments. Moreover, they observe that environmental spending shows a relationship with reduced air pollution exposure through the mechanism of higher institutional quality.

The paper, together with the rest of contributions to the most recent issue of Public Sector Economics, is open access and can be read and downloaded in the following link.