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Corruption and air pollution in Europe

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  • Kate Ivanova

Abstract

This paper examines how the effectiveness of regulatory framework influences levels of sulphur emissions in a scenario where, to reduce its (emission-) tax payments, a polluting firm may under-report emissions level at the risk of being audited and fined. First, a model to explain how changes in regulatory framework (e.g., audit effectiveness) and transboundary spillovers affect both actual and reported emissions is developed. Then the theoretical predictions using data for 39 European countries from 1999 to 2003 are tested and inferences about true emission levels are made. The empirical analysis supports the theoretical predictions with significant implications for the interpretation of pollution data reported to international monitoring agencies. Countries with effective regulation are likely to have relatively high reported emissions of sulphur. But this should not automatically be interpreted as weak environmental performance, because their actual pollution levels are likely to be lower than in nations with less effective regulation. Copyright 2011 Oxford University Press 2010 All rights reserved, Oxford University Press.

Suggested Citation

  • Kate Ivanova, 2011. "Corruption and air pollution in Europe," Oxford Economic Papers, Oxford University Press, vol. 63(1), pages 49-70, January.
  • Handle: RePEc:oup:oxecpp:v:63:y:2011:i:1:p:49-70
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    File URL: http://hdl.handle.net/10.1093/oep/gpq017
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    Cited by:

    1. Varvarigos, Dimitrios, 2023. "Cultural persistence in corruption, economic growth, and the environment," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).
    2. Yanlei Zhang, 2021. "Greasing Dirty Machines: Evidence of Pollution-Driven Bribery in China," Journal of Business Ethics, Springer, vol. 170(1), pages 53-74, April.
    3. Dasgupta, Shouro & De Cian, Enrica, 2016. "Institutions and the Environment: Existing Evidence and Future Directions," MITP: Mitigation, Innovation and Transformation Pathways 240747, Fondazione Eni Enrico Mattei (FEEM).
    4. Fuhai Hong & Tat-How Teh, 2019. "Bureaucratic Shirking, Corruption, and Firms’ Environmental Investment and Abatement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 505-538, October.
    5. Concetta Castiglione & Davide Infante & Janna Smirnova, 2018. "Non-trivial Factors as Determinants of the Environmental Taxation Revenues in 27 EU Countries," Economies, MDPI, vol. 6(1), pages 1-20, January.
    6. Stefan Borsky & Esther Blanco, 2014. "Setting one voluntary standard in a heterogeneous Europe - EMAS, corruption and stringency of environmental regulations," Working Papers 2014-29, Faculty of Economics and Statistics, Universität Innsbruck.
    7. Eleni Stathopoulou & Dimitrios Varvarigos, 2013. "Corruption, Entry and Pollution," Discussion Papers in Economics 13/21, Division of Economics, School of Business, University of Leicester.
    8. Per G. Fredriksson & Eric Neumayer, 2016. "Corruption and Climate Change Policies: Do the Bad Old Days Matter?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 451-469, February.
    9. Haiqing Hu & Di Chen & Chun‐Ping Chang & Yin Chu, 2021. "The Political Economy Of Environmental Consequences: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 35(1), pages 250-306, February.
    10. Arminen, Heli & Menegaki, Angeliki N., 2019. "Corruption, climate and the energy-environment-growth nexus," Energy Economics, Elsevier, vol. 80(C), pages 621-634.
    11. Dimitrios Varvarigos, 2013. "Economic Growth, Health, and the Choice of Polluting Technologies: The Role of Bureaucratic Corruption," Discussion Papers in Economics 13/22, Division of Economics, School of Business, University of Leicester.
    12. Morakinyo Adetutu & Anthony Glass & Karligash Kenjegalieva & Robin Sickles, 2015. "The effects of efficiency and TFP growth on pollution in Europe: a multistage spatial analysis," Journal of Productivity Analysis, Springer, vol. 43(3), pages 307-326, June.
    13. Alexandra-Anca Purcel, 2019. "Does Political Stability Hinder Pollution? Evidence From Developing States," Economic Research Guardian, Weissberg Publishing, vol. 9(2), pages 75-98, December.
    14. Anthony J. Glass & Karligash Kenjegalieva & Robin Sickles, 2012. "The Effects of Efficiency and TFP Growth on Nitrogen and Sulphur Emissions in Europe: A Multistage Spatial Analysis," Discussion Paper Series 2012_11, Department of Economics, Loughborough University, revised Oct 2012.
    15. Dincer, Oguzhan C. & Fredriksson, Per G., 2018. "Corruption and environmental regulatory policy in the United States: Does trust matter?," Resource and Energy Economics, Elsevier, vol. 54(C), pages 212-225.
    16. Shi Wang & Yizhou Yuan & Hua Wang, 2019. "Corruption, Hidden Economy and Environmental Pollution: A Spatial Econometric Analysis Based on China’s Provincial Panel Data," IJERPH, MDPI, vol. 16(16), pages 1-23, August.
    17. Kim, Byung-Cheol & Oliver, Matthew E., 2017. "Taming drillers through legislative action: Evidence from Pennsylvania’s shale gas industry," Resource and Energy Economics, Elsevier, vol. 50(C), pages 15-35.
    18. Wen-Lin Wu, 2017. "Institutional Quality and Air Pollution: International Evidence," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 16(1), pages 49-74, June.
    19. Peiyao Shen & Regina Betz & Andreas Ortmann & Rukai Gong, 2020. "Improving Truthful Reporting of Polluting Firms by Rotating Inspectors: Experimental Evidence from a Bribery Game," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(2), pages 201-233, July.
    20. Shi Wang & Hua Wang & Qian Sun, 2020. "The Impact of Foreign Direct Investment on Environmental Pollution in China: Corruption Matters," IJERPH, MDPI, vol. 17(18), pages 1-20, September.
    21. Stefan Borsky & Paul A. Raschky, 2015. "Intergovernmental Interaction in Compliance with an International Environmental Agreement," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(2), pages 161-203.

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