Environmental Compliance, Corruption and Governance: Theory and Evidence on Forest Stock in Developing Countries
This paper analyses the relationships between environmental compliance, corruption and environmental regulations in the case of forestry. Using a Principal-Agent model, we highlight interrelationships between firm's environmental non-compliance and corruption conditioned to the efficiency of the legal and regulatory framework. Moreover, we show that environmental compliance and judicial efficiency may be complementary or substitutable depending on the level of judicial efficiency to strengthen the forest stock. After having design a new indicator of environmental compliance, we test these predictions using cross section data for 59 developing countries. The empirical results support the predictions of the model. Judicial efficiency reduces corruption and environmental non compliance which are positively correlated and conditioned to judicial efficiency. We also find empirical evidences on the substitutability and complementarity of environmental compliance and judicial efficiency to preserve the forest stock.
|Date of creation:||19 Jan 2011|
|Date of revision:|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00557677|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Pop-Eleches, Cristian & Shleifer, Andrei, 2004.
"Judicial Checks and Balances,"
3451311, Harvard University Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-00557677. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.