IDEAS home Printed from https://ideas.repec.org/a/eee/ecosys/v49y2025i2s0939362524000906.html
   My bibliography  Save this article

Do environmental taxes corrupt governments?

Author

Listed:
  • Nguyen, Canh Phuc
  • Doytch, Nadia
  • Nguyen, Binh Quang
  • Tran, Duyen Thuy Le

Abstract

In this study, we examine the effects of four environmental taxes (taxes on carbon, energy, resources, and transport) on two indices of anti-corruption (the Control of Corruption Index [CC] and the Corruption Perceptions Index [CPI]) and a third index, the Political Corruption Index (PCI), shedding light on the question whether the implementation of environmental taxes leads to more government corruption. Our hypothesis is that firms that are affected by environmental taxes may compensate for or evade the loss of revenue through some corrupt practices and behaviors. We conduct a rich empirical analysis for a global sample of 111 countries and two subsamples (45 high-income countries and 66 low- and middle-income countries) from 2002 to 2020. Most environmental taxes have significant positive effects on CC and CPI, while they have negative effects on PCI, implying that environmental taxes appear to increase anti-corruption indices. We also discuss the possible channels for the effects of environmental taxes on corruption: general government expenditure, and taxes on income, profits, and capital gains. Accordingly, we uncover a plethora of interesting findings that are robust to multiple secondary tests.

Suggested Citation

  • Nguyen, Canh Phuc & Doytch, Nadia & Nguyen, Binh Quang & Tran, Duyen Thuy Le, 2025. "Do environmental taxes corrupt governments?," Economic Systems, Elsevier, vol. 49(2).
    • Handle: RePEc:eee:ecosys:v:49:y:2025:i:2:s0939362524000906
    DOI: 10.1016/j.ecosys.2024.101268
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0939362524000906
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecosys.2024.101268?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Tax; Environmental Tax; Corruption; Government; Environment;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecosys:v:49:y:2025:i:2:s0939362524000906. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://edirc.repec.org/data/osteide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.