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Previous research in the field of Environmental Federalism has not reached an agreement on whether fiscal decentralization leads to an increase in environmental pollution, i.e. a race to the bottom, or decrease in it, i.e. a a race to the top. Farzanegan and Mennel (2012) point out that this discrepancy may be due to institutions. Employing the OLS estimator, they find that fiscal decentralization
