Environment-growth nexus and corruption in the MENA region: Novel evidence based on method of moments quantile estimations

Abstract

This study contributes to the environment-growth nexus literature by examining corruption's effect on environmental quality in 17 Middle East and North Africa (MENA) countries between 1984 and 2018. We use four different indicators of environmental degradation (ecological footprint, carbon dioxide emissions, greenhouse gas emissions, and carbon emission intensity) to gain a comprehensive view of the relationship. This study's methodological value added is the application of the method of moments quantile regression, which enables us to account for different relationships between the independent variables and environmental quality at different levels of environmental degradation. The results indicate that corruption worsens environmental quality based on three of the four indicators of environmental degradation, while the impact appears to become less severe at higher levels of environmental deterioration. The results also indicate that traditional mean-based panel data estimation methods provide an incomplete picture of the factors behind environmental problems: The explanatory variables' impacts tend to vary at different levels of environmental quality, and the impact's sign can even change when moving from the lowest to the highest environmental degradation quantiles. Overall, the results highlight the importance of curbing corruption to enable enforcement of more stringent environmental regulations.