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Remittances and deforestation in developing countries: Is institutional quality paramount?

Author

Listed:
  • Komivi Afawubo

    (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine)

  • Yawo Agbényégan Noglo

    (Mosaïques - LAVUE - Laboratoire Architecture, Ville, Urbanisme, Environnement - UP8 - Université Paris 8 Vincennes-Saint-Denis - ENSAPLV - École nationale supérieure d'architecture de Paris-La Villette - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université - UPN - Université Paris Nanterre - ENSA PVDS - École nationale supérieure d'architecture de Paris Val-de-Seine - CNRS - Centre National de la Recherche Scientifique - MC - Ministère de la Culture)

Abstract

This study examines the impact of remittance inflows on deforestation in developing countries. We also investigate the role of institutional quality in enhancing remittances' effect in reducing deforestation. Our results suggest that overall remittances reduce deforestation. We show that remittances' reduction effect on deforestation is greater in middle-income countries than in low-income countries. Considering institutional quality, our findings suggest that, for the entire sample, and in low- and middle-income countries, control of corruption, political stability, government effectiveness and rule of law act to reduce deforestation. Moreover, institutional quality enhances the impact of remittances on reducing deforestation in the entire sample and in middle-income countries. In contrast, in low-income countries, institutional quality does not complement remittances to reduce deforestation.These results imply that, to reduce deforestation rates, the focus should not only be on economic development, but to an even greater extent, on institutional quality.

Suggested Citation

  • Komivi Afawubo & Yawo Agbényégan Noglo, 2019. "Remittances and deforestation in developing countries: Is institutional quality paramount?," Post-Print hal-02314897, HAL.
    • Handle: RePEc:hal:journl:hal-02314897
    DOI: 10.1016/j.rie.2019.10.001
    Note: View the original document on HAL open archive server: https://hal.univ-lorraine.fr/hal-02314897
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    2. Galarza, Francisco & Kámiche Zegarra, Joanna & Gómez de Zea, Rosario, 2023. "Roads and deforestation: do local institutions matter?," Working Papers 23-03, Centro de Investigación, Universidad del Pacífico.
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    5. Ibrahim Ayoade Adekunle & Tolulope Oyakhilome Williams & Olatunde Julius Omokanmi & Serifat Olukorede Onayemi, 2020. "The Mediating Role Of Institutions In The Remittance–Growth Relationship: Evidence From Nigeria," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(227), pages 7-30, October –.
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    8. Hafiz Syed Mohsin Abbas & Samreen Gillani & Saif Ullah & Muhammad Ahsan Ali Raza & Atta Ullah, 2020. "Nexus Between Governance and Socioeconomic Factors on Public Service Fragility in Asian Economies," Social Science Quarterly, Southwestern Social Science Association, vol. 101(5), pages 1850-1868, September.
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    More about this item

    Keywords

    Deforestation Remittances Institutional quality Developing countries;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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