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Environmental governance: disentangling the relationship between economic growth and rule of law on environmental policy stringency

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  • Meng-jieu Chen

    (University of Rhode Island)

Abstract

Economic growth and the rule of law development are two important factors that affect the stringency of environmental policy. Due to the reversible causality between the two variables, a reduced-form relationship is likely to oversimplify their effects. This paper develops a equation system to illuminate the interactive relationships between rule of law, economic development and the stringency of environmental policies and tests the robustness of the variables using sensitivity and weak instrumental variable tests. Nine determinants of rule-of-law including presence of a parliamentary system, coup d’états, and the degree of social fractionalization, are examined. We find that economic development, the rule of law, and their interactions have direct and indirect effects on a state’s environmental policies. We further find political coups have a significant impact on adherence to the rule of law. The nonparametric simulation indicates that long-run effect of rule-of-law development on environmental protection is likely considerably stronger than its direct effect.

Suggested Citation

  • Meng-jieu Chen, 2017. "Environmental governance: disentangling the relationship between economic growth and rule of law on environmental policy stringency," Letters in Spatial and Resource Sciences, Springer, vol. 10(2), pages 253-275, July.
    • Handle: RePEc:spr:lsprsc:v:10:y:2017:i:2:d:10.1007_s12076-017-0186-x
    DOI: 10.1007/s12076-017-0186-x
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    More about this item

    Keywords

    Rule of law; Environmental policy stringency; Income; Simultaneous equation system;
    All these keywords.

    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
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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