An Empirical Contribution to the Debate on Corruption, Democracy and Environmental Policy

35 Pages Posted: 2 Feb 2005

See all articles by Lorenzo Pellegrini

Lorenzo Pellegrini

Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS)

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management

Date Written: January 2005

Abstract

Both theoretical and empirical studies have shown that democracy and corruption have substantial influence on environmental policy. In this paper, we empirically analyse whether both democracy and corruption are equally important determinants. When these variables are jointly included as explanatory variables, we find that corruption stands out as an important determinant of environmental policies, while democracy has a very limited impact. Further on, we discuss our results in the context of the Environmental Kuznets Curve literature. We argue that institutional disarray that plagues developing countries will make it problematic for them to have increasing environmental policy stringency combined with increasing incomes. Finally, and more optimistically, when we consider our results in the context of institutions and growth, we conclude that there is a possibility of reaching a double dividend. Reductions in corruption would induce both higher growth rates and stricter environmental policies. Thus, institutional improvement is an extremely valuable step in achieving sustainable development.

Keywords: Corruption, Democracy, Development, Environmental policy, Institutions

JEL Classification: H40, D73, Q56, Q58

Suggested Citation

Pellegrini, Lorenzo and Gerlagh, Reyer, An Empirical Contribution to the Debate on Corruption, Democracy and Environmental Policy (January 2005). FEEM Working Paper No. 08.05. Available at SSRN: https://ssrn.com/abstract=654401 or http://dx.doi.org/10.2139/ssrn.654401

Lorenzo Pellegrini (Contact Author)

Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS) ( email )

PO Box 29776
2502 LT The Hague, 2518 AX
Netherlands

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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