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Trade liberalization, corruption, and environmental policy formation: theory and evidence

  • Damania, Richard
  • Fredriksson, Per G.
  • List, John A.

This study explores the linkages between trade policy, corruption, and environmental policy. We begin by presenting a theoretical model that produces several testable predictions, including: (i) the effect of trade liberalization on the stringency of environmental policy depends on the level of corruption; and (ii) corruption reduces environmental policy stringency. Using panel data from a mix of developed and developing countries from 1982 to 1992, we find evidence that supports these conjectures. We view these results as representing an attempt at understanding the myriad of complex relationships that exist in an open economy.

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Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 46 (2003)
Issue (Month): 3 (November)
Pages: 490-512

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Handle: RePEc:eee:jeeman:v:46:y:2003:i:3:p:490-512
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622870

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