- Jared J. Finnegan Princeton University
Many policy problems require taking costly action today for future benefits. Do institutions structure the ability of governments to address long-term challenges? Examining the case of climate change, this paper argues yes. It focuses on the way that two institutions – electoral rules and interest group intermediation – drive variation in climate policies across the high-income democracies by structuring the political conditions needed for them to occur. Proportional electoral rules increase electoral safety, allowing politicians to impose short-term costs on constituents. Institutionalized relationships between industry and the state enable governments to compensate losers, defusing organized opposition to policy change. Moreover, their joint presence generates powerful institutional complementarities that push countries onto distinct varieties of decarbonization. Tests using new data on shadow carbon prices provide empirical support for the arguments.