Image Source: pexels.com/Felix Mittermeier
2020
REGION: Global

In “Dynamic Nexus among Tourism, Corruption, Democracy and Environmental Degradation: a Panel Data Investigation,” Muhammad Haseeb and Muhammad Azam examine the relationship between democracy and CO2 emissions, as well as between corruption and CO2 emissions. Through empirical analysis, the authors conclude that as democracy decreases, CO2 emissions increase for all countries except low-income countries, and that as corruption increases, CO2 emissions increase for all countries.

The authors develop two theories as to why democracy and corruption have an effect on CO2 emissions. First, they theorize that less democracy leads to higher CO2 emissions because citizens’ preferences are given greater weight, and the marginal cost of implementing proenvironment policies is lower than in autocratic regimes. Second, they theorize that greater corruption leads to higher CO2 emissions because it is more common for emitters of CO2 to evade responsibility in societies where bribery shapes policy. In this study, corruption refers specifically to government officials’ ability to put their own fiscal needs before the environment and escape legal action when they break the law. According to Haseeb and Azam, this behavior leads to a higher CO2 emissions output.

Haseeb and Azam perform a set of statistical tests to find a relationship between democracy and CO2 emissions, as well as corruption and CO2 emissions. To measure democracy, they use quantitative data from Freedom House; and to measure corruption, they use data from Transparency International. Data on CO2 emissions from 1995 to 2015 were sourced from a 2018 World Bank database and used in both tests. To test their theories, the authors divide the countries into four categories: high-income, upper-middle-income, lower-middle-income, and low-income. Within these categories are the top five CO2 producers that fall into each income level.

Based on their test results, Haseeb and Azam conclude that there are significant relationships between (1) democracy and CO2 emissions and (2) corruption and CO2 emissions. Haseeb and Azam find that a 1.00% increase in the democracy index causes a decrease in CO2 emissions of 0.20%, 0.44%, 0.12%, and 0.55% respectively in high income countries, upper-middle-income countries, lower-middle-income countries, and worldwide. Low-income countries, however, do not follow this pattern. Haseeb and Azam find that low-income countries’ CO2 emissions are not affected by changes in levels of democracy but do not provide an explanation as to why this outcome occurs. In the test focusing on corruption, Haseeb and Azam find that for every 1.00% increase in the corruption index, the CO2 emissions increase by 0.09%, 0.30%, 0.53%, 0.88%, and 1.05% respectively in high income countries, upper-middle-income countries, lower-middleincome countries, low-income countries, and worldwide.

Overall, these findings demonstrate empirically that democracy and corruption both play a role in global emission levels. With this information, practitioners and policymakers can examine more effectively how governance reform, regardless of income, can mitigate the effects of climate change. However, more research may be needed to determine why low-income countries behave differently than others in regard to the relationship between democracy and CO2 emissions.


NOTE: This summary is produced by the Rule of Law Collaborative, not by the original author(s).

Dynamic Nexus among Tourism, Corruption, Democracy and Environmental Degradation: a Panel Data Investigation

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