Global relationships between time preference and environmental policy performance

Abstract

How our governments deal with environmental crises can depend on national culture, including time preference (i.e., short- vs. long-term orientation). Here, we follow up on the hypothesis that long-term orientation increases environmental policy performance. To this end, we use three time preference indices (including a newly constructed index with a wide spatial coverage based on Google search data). Our results show that countries with higher long-term orientation have higher environmental policy performance. This relationship is in most cases because of the positive association of long-term orientation and environmental policy performance with economic development and other factors. Only the analysis with increased spatial coverage (especially to African and Asian countries) using Google long-term orientation shows some results indicating positive relationships when considering economic development and other factors. Still, also in this analysis, the positive relationships are largely because of economic development and other factors. Expanding the spatial coverage when measuring time preference might add insights into the time preference-environmental policy performance relationship. Moreover, the results show that researchers need to control for important factors, especially economic development, when analyzing time preference and environmental policy performance or related questions, such as environmental behavior and culture, as these factors can completely, or at least largely, drive the results.