Money and Cooperative Federalism: Evidence from EPA Civil Litigation

Hye Young You (New -York University)

December 13, 2022, 11:30–12:30


Room Auditorium 4 (1st Floor - TSE building )


The federalism structure of the US government requires active cooperation from state governments to successfully enforce federal regulations. What explains state governments' participation in lawsuits against firms that are accused of violating major environmental statutes? We argue that firms' political connections with state politicians affect a state government's decision to join the litigation process. Constructing a novel dataset on the EPA's civil cases and settlements for the period 1998-2021, we show that state environmental agencies are less likely to join the EPA in court when the defendant firms contributed to Republican state legislators. We do not find the same pattern when firms have connections with Democratic legislators. We also show that state involvement in litigation is associated with higher penalties as well as more environmental provisions in the judicial outcomes. Our findings highlight how state politics can be an avenue for firms to exert influence on federal regulations.


Hye Young You (New -York University), Money and Cooperative Federalism: Evidence from EPA Civil Litigation, IAST General Seminar, Toulouse: IAST, December 13, 2022, 11:30–12:30, room Auditorium 4 (1st Floor - TSE building ).