Does corruption have adverse impact on greenhouse gases emissions : Empirical evidence / Nourhan Abdelhamid Sayed Hassan ; Supervised Chahir Zaki , Dalia M. Ibrahiem

Thesis (M.Sc.) - Cairo University - Faculty of Economics and Political Science - Department of Economics

This thesis focuses on the environmental consequences of corruption. Beside the political, economic and social costs of corruption, there is a growing body of literature suggesting that corruption can also have adverse impacts on environmental issues. Theoretical literature defines two channels through which corruption affects the environment: policy formation and policy implementation. On one hand, corruption can lead to the development of environmentally damaging policies as decisions makers{u2019} private interests may influence public policies. On the other hand, corruption hampers the enforcement of environmental laws through manipulating environmental inspections and permitting system. Based on the theoretical model by López and Mitra (2000), corruption is expected to increase emissions levels at any per capita income level. This thesis investigates the empirical validity of the previous hypothesis by López and Mitra (2000) for the case of greenhouse gases (GHGs) emissions. A fixed effects panel data model is estimated to examine the effect of corruption on per capita GHGs emissions on a sample of MENA countries on years 1996-2012. The thesis tests the existence of Environmental Kuznets Curve for GHGs emissions. The effects of the size of industrial sector, energy consumption, trade openness and FDI on GHGs emissions are also investigated. Our results support the empirical validity of the hypothesis of López and Mitra (2000) that corruption leads to higher emissions for the case of GHGs. Per capita income is found to be the key determinant of GHGs emissions in the region. Yet, no evidence is found for an Environmental Kuznets Curve for GHGs emissions. Instead, the relationship between per capita income and per capita GHGs emissions is found to follow N-shaped pattern.

Issued also as CD