The Effect of Corruption on Carbon Dioxide Emissions in the Mena Region

Abstract

Corruption has always been accused of having adverse effects on growth. This is because it decreases productivity, leads to accumulation of additional costs and discourages investment. Recently, high concerns are raised about the impact of corruption on the environment. Corruption plays a substantial role in increasing pollution emissions level. In spite of this, empirical investigation of such an issue is still incomplete. For that, this research work represents a step forward in understanding the relationship between corruption and the environment in general and in filling the gap present in the literature in analyzing this relationship in the Middle East and North Africa (MENA) region in particular. Accordingly, this paper studies the corruption-environment relationship empirically through examining the effect of corruption on per-capita carbon dioxide emissions. A Fixed Effect Panel Data model is used to investigate the effects of corruption, per-capita income, trade openness and manufacturing on per-capita carbon dioxide emissions level in the MENA region over the period 1996-2013. The results indicate that corruption, per-capita income, trade openness and manufacturing value added are significant determinants of Carbon Dioxide Emissions. Policy implications to improve sustainability and governance are given. These include strong enforcement of law, spreading public awareness and increasing transparency.