Organizational Political Economy and Environmental Pollution

Abstract Environmental scholars have made important progress explaining the social forces associated with pollution. Although important exceptions exist, insufficient attention has been given to organizations, which is where most environmental pollution is produced. Even less attentions has been given to parent companies, which have ultimate decision‐making authority over their polluting facilities. To file this gap in the literature, this paper develops an organizational political economy perspective to advance our understanding of how organizational and political‐legal arrangements affect parent companies' capacity to externalize their pollution costs to society. Organizational political economy maintains that corporations' organizational complexity, financial characteristics, management operating systems, political embeddedness in subnational states, and the degree of compliance with national and subnational environmental policies affect their capacity to externalize pollution costs. This perspective also shows how the exercise of organizational power to externalize pollution costs subsidizes the managerial and investor classes by the middle and working classes, whose taxes pay for a large share of environmental clean‐up costs, thereby contributing to economic inequality that goes beyond standard inequality measurements.