Democratic Institutions and Environmental Quality: Effects and Transmission Channels
AbstractThis paper aims at analysing the effect of democratic institutions on environmental quality (carbon dioxide per capita, sulfure dioxide per capita) and at identifying potential channel transmissions. We use panel data from 1960 to 2008 in 122 developing and developed countries and modern econometric methods. The results are as follows: Firstly, we show that democratic institutions have opposite effects on environment quality: a positive direct effect on environment quality and a negative indirect effect through investments and income inequality. Indeed, democratic institutions attract investments that hurt environment quality. Moreover, as democratic institutions reduce income inequality, they also damage environment. Secondly, we find that the direct negative effect of democratic institutions is higher for local pollutant (SO2) than for global pollutant (CO2). Thirdly, the nature of democratic institutions (presidential, parliamentary) is not conducive to environmental quality. Fourtly, results suggest that the direct positive effect of democratic institutions on environment quality is higher in developed countries than in developing countries. Thus, the democratic process in the first group of countries has increased their awareness for the environment protection.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 120396.
Date of creation: 2011
Date of revision:
Democratic institutions; Air pollution; Panel data; Income inequality; Investments; Environmental Economics and Policy; O43; Q53; C23; D31; E22;
Other versions of this item:
- Kinda, Romuald, 2010. "Democratic institutions and environmental quality: effects and transmission channels," MPRA Paper 27455, University Library of Munich, Germany.
- Kinda, Somlanare Romuald, 2011. "Democratic Institutions and Environmental Quality: Effects and Transmission Channels," Proceedings of the German Development Economics Conference, Berlin 2011 46, Verein für Socialpolitik, Research Committee Development Economics.
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
- NEP-ENE-2012-02-20 (Energy Economics)
- NEP-ENV-2012-02-20 (Environmental Economics)
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