Environmental and Resource Economics

, Volume 68, Issue 2, pp 297–318 | Cite as

An Empirical Study of the Impact of Corruption on Environmental Performance: Evidence from Panel Data

Article
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Abstract

This paper extends the empirical debate on the effects of corruption on environmental degradation by considering a recently available measure of environmental quality, the Environmental Performance Index. This indicator is more comprehensive than the measures of air pollutant emissions commonly used in the literature and, in particular, can also capture the impact of pollution on human health. This allows for a better understanding of the actual effects of a wide range of human activities on the ecosystem. From a panel data analysis, two regularities emerge. First, corruption deteriorates the overall environmental quality. This effect is robust and persistent. Second, our findings highlight the improvement of environmental quality as income rises, even at an initial level of development. This is not in contradiction with the EKC hypothesis because an increase in income levels provides positive externalities on the whole environmental quality by compensating the mere negative effects induced by industrialization on the emission levels. As a consequence, in emerging economies, policies fighting corruption and enhancing development are very likely to improve the environmental performances.

Keywords

Corruption EKC Pollution Panel data Panel VAR 

JEL Classification

C23 D73 O44 Q56 

Notes

Acknowledgments

The authors thank participants at the third IAERE Annual Conference in Padua (Italy) for comments and suggestions. We also thank two anonymous referees. The usual disclaimer applies.

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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MessinaMessinaItaly

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