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The Corruption Paradox: Assessing Environmental Impacts in the GCC Region

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Listed:
  • Hayet, Kaddachi
  • Naceur, Benzina

Abstract

This study examines the impact of corruption on environmental quality in GCC countries from 2003 to 2021, focusing in particular on direct and indirect impacts on CO2 emissions. We use two-stage least squares (2SLS) panel regression analysis to account for potential endogeneity and provide robust empirical evidence. The results show that corruption has a direct and significant positive effect on environmental quality. This suggests that some corrupt practices can lead to short-term emission reductions by delaying or distorting large, environmentally harmful projects. However, it also has indirect negative effects: corruption undermines economic growth and institutional integrity and ultimately worsens long-term environmental impacts. Overall, the positive effects of corruption on environmental quality are positive, although they are differentiated and context-dependent. In addition, the Environmental Kuznets Curve (EKC) hypothesis is tested. This suggests that after an initial decline in emissions, environmental destruction could resume as income levels rise. These findings provide valuable insights for policymakers seeking to strengthen institutional governance, eradicate corruption, and promote sustainable environmental policies in resource-dependent economies.

Suggested Citation

  • Hayet, Kaddachi & Naceur, Benzina, 2025. "The Corruption Paradox: Assessing Environmental Impacts in the GCC Region," MPRA Paper 124830, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:124830
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    File URL: https://mpra.ub.uni-muenchen.de/124830/1/MPRA_paper_124830.pdf
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    References listed on IDEAS

    as
    1. Shahbaz, Muhammad & Sinha, Avik, 2019. "Environmental Kuznets Curve for CO2 emission: A survey of empirical literature," MPRA Paper 100257, University Library of Munich, Germany, revised 2019.
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    3. Welsch, Heinz, 2004. "Corruption, growth, and the environment: a cross-country analysis," Environment and Development Economics, Cambridge University Press, vol. 9(5), pages 663-693, October.
    4. Wang, Zhaohua & Danish, & Zhang, Bin & Wang, Bo, 2018. "The moderating role of corruption between economic growth and CO2 emissions: Evidence from BRICS economies," Energy, Elsevier, vol. 148(C), pages 506-513.
    5. Pal, Debdatta & Mitra, Subrata Kumar, 2017. "The environmental Kuznets curve for carbon dioxide in India and China: Growth and pollution at crossroad," Journal of Policy Modeling, Elsevier, vol. 39(2), pages 371-385.
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    More about this item

    Keywords

    Corruption; environmental quality; CO2 emissions; EKC; Economic Growth;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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