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Letters in Spatial and Resource Sciences

, Volume 10, Issue 2, pp 253–275 | Cite as

Environmental governance: disentangling the relationship between economic growth and rule of law on environmental policy stringency

Original Paper

Abstract

Economic growth and the rule of law development are two important factors that affect the stringency of environmental policy. Due to the reversible causality between the two variables, a reduced-form relationship is likely to oversimplify their effects. This paper develops a equation system to illuminate the interactive relationships between rule of law, economic development and the stringency of environmental policies and tests the robustness of the variables using sensitivity and weak instrumental variable tests. Nine determinants of rule-of-law including presence of a parliamentary system, coup d’états, and the degree of social fractionalization, are examined. We find that economic development, the rule of law, and their interactions have direct and indirect effects on a state’s environmental policies. We further find political coups have a significant impact on adherence to the rule of law. The nonparametric simulation indicates that long-run effect of rule-of-law development on environmental protection is likely considerably stronger than its direct effect.

Keywords

Rule of law Environmental policy stringency Income Simultaneous equation system 

JEL Classification

Q56 Q58 C30 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  1. 1.Department of Environmental and Natural Resource Economics, Coastal InstituteUniversity of Rhode IslandKingstonUSA

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