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

Posted: 30 Oct 2017

See all articles by Maurizio Lisciandra

Maurizio Lisciandra

University of Messina - Department of Economics

Carlo Migliardo

University of Messina - Department of Economics

Date Written: October 2017

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

Suggested Citation

Lisciandra, Maurizio and Migliardo, Carlo, An Empirical Study of the Impact of Corruption on Environmental Performance: Evidence from Panel Data (October 2017). Environmental and Resource Economics, Vol. 68, No. 2, October 2017; DOI/10.1007/s10640-016-0019-1, Available at SSRN: https://ssrn.com/abstract=3060652

Maurizio Lisciandra (Contact Author)

University of Messina - Department of Economics ( email )

Piazza Pugliatti 1
Messina, 98122
Italy
+39 (0)906764620 (Phone)

HOME PAGE: http://https://sites.google.com/site/mlisciandra/

Carlo Migliardo

University of Messina - Department of Economics ( email )

Via T. Cannizzaro 278
Messina, 98122
Italy

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