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Cultural persistence in corruption, economic growth, and the environment

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  • Varvarigos, Dimitrios

Abstract

Evidence that attributes current environmental outcomes to historical and cultural origins has gained momentum in recent years. In this study, I construct a model to demonstrate why the relation between economic growth and environmental quality hinges on the deeply rooted cultural traits that govern attitudes towards corruption. Specifically, I show that the cultural transmission of the traits that determine the corruptibility of public officials, who are entrusted with the inspection and reporting of firms’ emissions, leads to history-dependant outcomes. It sets in motion either a vicious circle of corruption, high pollution and low economic growth, or a virtuous circle where corruption does not infringe environmental policy, pollution is lower and economic growth is higher. These outcomes have major policy implications.

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  • Varvarigos, Dimitrios, 2023. "Cultural persistence in corruption, economic growth, and the environment," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).
    • Handle: RePEc:eee:dyncon:v:147:y:2023:i:c:s0165188922002937
    DOI: 10.1016/j.jedc.2022.104590
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