The effect of corruption on carbon emissions in developed and developing countries: empirical investigation of a claim

Abstract

The impact of corruption on carbon emissions is one of the main objectives of empirical studies on environmental economics. Recently, a theoretical discussion was conducted on the significant impact of reducing the level of corruption on environmental quality in developing rather than in developed countries. In this study, an empirical investigation of this claim was conducted using panel data which included 61 countries, between 2003 and 2016. The effects of corruption on carbon emission were considered using a panel threshold model. The threshold variable included human development index (HDI) which divided countries into developing and developed ones endogenously. According to the results, the value of threshold (γ = 0.753) was consistent with the categorization of UNDP countries by HDI. In developing countries, for each unit of increase in the corruption index -which means a decrease in corruption levels- we observe a 0.08 unit decrease in carbon emission while carbon emission is no longer affected by the corruption levels in developed countries and decrease in corruption does not have a significant effect on carbon emission levels.

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