Investigating Corruption, Income Inequality, and Environmental Degradation in Pakistan: A Time Series Analysis

The aim of this study is to investigate the intricate relationship between corruption, income inequality, and environmental degradation in Pakistan using time series data spanning from 1980 to 2022. Employing a rigorous empirical approach, we utilize a combination of statistical tests, including the Augmented Dickey Fuller and Dickey Fuller Generalized Least Square unit root tests, alongside the autoregressive distributed lag approach to cointegration and an error correction model. Our empirical analysis yields several key findings that shed light on the complex dynamics at play. Firstly, we confirm the presence of an Environmental Kuznets Curve (EKC) in the context of Pakistan, suggesting that environmental degradation initially worsens with economic development before reaching a turning point and subsequently improving. Moreover, our results reveal intriguing insights into the interplay between corruption, income inequality, and environmental degradation. Specifically, we find that in the absence of corruption, income inequality exhibits a negative correlation with environmental degradation, implying that a more equitable distribution of income may mitigate environmental pressures. However, this relationship is reversed in the presence of corruption, where the combined effect of corruption and income inequality exerts a positive impact on environmental degradation in the long run. These findings underscore the multifaceted nature of the relationship between socio-economic factors and environmental outcomes, highlighting the importance of considering contextual factors such as corruption in understanding environmental degradation dynamics. Furthermore, our results have significant implications for policymakers and stakeholders tasked with formulating strategies to address environmental challenges in Pakistan. By recognizing the intertwined nature of corruption, income inequality, and environmental degradation, policymakers can develop more targeted and effective interventions aimed at promoting sustainable development and fostering environmental stewardship. From enhancing anti-corruption measures to implementing policies that promote income equality and environmental sustainability, there exists a range of avenues through which Pakistan can navigate towards a more sustainable and equitable future. This study contributes to the growing body of literature on the nexus between corruption, income inequality, and environmental degradation, providing valuable insights for policymakers, researchers, and practitioners alike. By elucidating the underlying dynamics and implications of these relationships, we aim to inform evidence-based policy interventions that promote sustainable development and environmental conservation in Pakistan and beyond.