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Corruption, Inequality, and Environmental Regulation


  • Jie He

    () (GREDI, Département d'économique, Université de Sherbrooke)


    () (Departement d’´economique and CEREF, Universite de Sherbrooke, 2550 boulevard de l’Universite, Sherbrooke, Québec, Canada, J1K 2R1)

  • Quentin WODON

    () (LCSPR, World Bank, 1818 H Street, NW, Washington, DC 20433, USA)


We develop two public choice models in which environmental regulation is determined endogenously in the presence of agents who are heterogenous in wealth or income. In the first model, regulation is determined by a majority vote, and an increase in inequality induces an increase in environmental standard. In the second model, the environmental standard is chosen by a corrupt bureaucrat. In that model, while the impact of an increase in inequality on the environmental standard is uncertain, a higher level of corruption always reduces the quality of environmental regulation. An empirical analysis using cross-country data confirms the implication of both models.

Suggested Citation

  • Jie He & Paul MAKDISSI & Quentin WODON, 2007. "Corruption, Inequality, and Environmental Regulation," Cahiers de recherche 07-13, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
  • Handle: RePEc:shr:wpaper:07-13

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    References listed on IDEAS

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    Cited by:

    1. José-Antonio Monteiro & Madina Kukenova, 2008. "Does Lax Environmental Regulation Attract FDI When Accounting For "Third-Country" Effects?," IRENE Working Papers 08-01, IRENE Institute of Economic Research.
    2. Liao, Xianchun & Dogan, Eyup & Baek, Jungho, 2017. "Does corruption matter for the environment? Panel evidence from China," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 11, pages 1-12.
    3. Yang, Haisheng & He, Jie & Chen, Shaoling, 2015. "The fragility of the Environmental Kuznets Curve: Revisiting the hypothesis with Chinese data via an “Extreme Bound Analysis”," Ecological Economics, Elsevier, vol. 109(C), pages 41-58.
    4. Matthieu Clement & Andre Meunie, 2010. "Is Inequality Harmful for the Environment? An Empirical Analysis Applied to Developing and Transition Countries," Review of Social Economy, Taylor & Francis Journals, vol. 68(4), pages 413-445.

    More about this item


    Environmental regulation; corruption; inequality;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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