Lorenzo Pellegrini

Corruption, Democracy, and Environmental Policy: An Empirical Contribution to the Debate

Theoretical and empirical studies have shown that democracy and corruption influence environmental policies. In this article, the authors empirically analyze the relative importance of these determinants of environmental policy. When these variables are jointly included as explanatory variables in a multiple regression analysis, the authors found that corruption stands out as a substantial and significant determinant of environmental policies, while proxies for democracy have an insignificant impact. Nevertheless, democracy could affect environmental policy stringency given that countries with a history of democratic rule tend to be less corrupted. The authors argue that improving environmental quality following increasing income is less probable in developing countries with institutional disarray. Finally, and more optimistically, when considering the results in the context of institutions and growth, the authors conclude that there is scope for reaping a double dividend, when institutional improvements and reductions in corruption induce higher economic growth rates and stricter environmental policies.

Economic Analysis of Corruption

In this chapter, we contextualize and discuss the issue of defining corruption, endorsing a definition that focuses on the abuse of power. We also discuss how limiting the scope of corruption to the public sector contradicts the understanding that is common in the public and also in the economic science. Furthermore, we show how policies that are based on a concept of corruption that narrowly ascribes the phenomenon to the public sector , can reach simplistic conclusions such as that the extent of the public sector is invariably positively correlated with the occurrence of corruption. Such conclusions might drive policies that cannot satisfactorily address the problem of corruption, are conceptually flawed and are not backed by empirical analysis that enquired into the relation between the public sector and corruption. In this context, we also scrutinize the proposition that there is an evident trade-off between market failure s and corruption. On the contrary, anticipating one of the main conclusions of this book, we argue that corruption is one of the causes of the persistence of market failure s. The abuse of power for private gains in the case of environmental policies is an egregious example of how public institutions fail in dealing with issues that cannot be solved solely by market mechanisms because of corruption. Finally, the chapter also contains a discussion of basic concepts used throughout the book and of issues related to the measurement of corruption .

Crop diversification, dietary diversity and agricultural income: empirical evidence from eight developing countries

Abstract This study sheds light on the dilemma between food crop specialisation and diversification. We use data from household surveys to estimate the effects of crop diversification on nutrition (dietary diversity) and on income (crops sold) of rural households from eight developing and transition economies. We find that the vast majority of households grow crops despite the modest contribution of agriculture to income. Most agricultural land is devoted to staple food production; high-value commodities such as fruits and vegetables are also produced, but in limited quantities. Both descriptive statistics and regression results show a positive correlation between the number of crops cultivated, household income from crops and the two indicators we use for dietary diversity, also after controlling for household characteristics.

Corruption, Development and the Environment

1. Introduction.- 1.1 Background.- 1.2 Economics of Corruption.- 1.3 Research Questions and Outline.- 2. Economic Analysis of Corruption.- 2.1 Introduction.- 2.2 The Definition of Corruption.- 2.3 Corruption and the Private Sector.- 2.4 The Measurement of Corruption.- 2.5 Discussion.- 3. Causes of Corruption: A Curvey of Cross-Country Analyses and Extended Results.- 3.1 Introduction.- 3.2 Theories of Determinants of Corruption.- 3.3 Data Sources on Corruption.- 3.4 Empirical Analysis.- 3.5 Limits and Interpretation of Econometric Cross-Country Analysis.- 3.6 Discussion and Conclusions.- 3.7 Appendix: Data.- 4. The Effect of Corruption On Growth and Its Transmission Channels.- 4.1 Introduction.- 4.2 Cross Country Growth Regressions.- 4.3 Transmission Channels for Corruption.- 4.4 Direct and Indirect Effects of Corruption.- 4.5 The Long-term Effect of Corruption on the Transmission Variables.- 4.6 Conclusions.- 4.7 Appendix 1: Long-term Income Effects.- 4.8 Appendix 2: Robustness Checks.- 4.9 Appendix 3: Data.- 5. Corruption, Democracy and Environmental Policy: An Empirical Contribution To The Debate.- 5.1 Introduction.- 5.2 Theoretical Hypotheses and Their Empirical Testing.- 5.3 The Data.- 5.4 Empirical Results.- 5.5 Implications Or the Environmental Kuznets Curve.- 5.6 Conclusions.- 5.7 Appendix 1: Robustness Checks.- 5.8 Appendix 2: Data.- 6. Corruption and Environmental Policies: What Are the Implications For the Enlarged EU?- 6.1. Introduction.- 6.2. Determinants of Environmental Policy Stringency.- 6.3. Environmental Policies and Institutions in the EU.- 6.4. Conclusions.- 6.5. Appendix: Data.- 7. The Rule of the Jungle In Pakistan: A Case Study On Corruption and Forest Management In Swat.- 7.1 Introduction.- 7.2 Institutions and Forest Management.- 7.3 A Profile of Swat, Pakistan.- 7.4 Alternative Forest Management Regimes in Swat.- 7.5 Deforestation in Swat, Pakistan.- 7.6 Strategies for Institutional Change.- 7.7 Conclusions.- 7.8 Appendix: Sources of Information in the Study.- 8. Conclusions and Future Research.- 8.1 Main conclusions.- 8.2 Policy conclusions.- 8.3 Future research.- Subject/Author Index.

Consultation, Compensation and Extraction in Bolivia after the ‘Left Turn’: The Case of Oil Exploration in the North of La Paz Department

Bolivia is part of the left-turn that Latin America has seen since the end of the 1990s. The country was traditionally ruled by a conservative establishment and political instability characterized a decade of conflicts that culminated in the ascendency of the Movement towards Socialism (Movimiento al Socialismo, MAS) and, in 2006, of the first indigenous president -Evo Morales. The election of Morales and the subsequent changes to the Bolivian state have been praised by some scholars as revolutionary, while others have argued that these changes essentially consist of a continuation and re-constitution of neo-liberal regimes. This paper highlights the changes in compensation and redistribution policies that have accompanied the nationalization of hydrocarbons and the institutionalization of consultation processes for indigenous peoples affected by hydrocarbons activities. In this context, we analyse an oil exploration project that took place in the north of the La Paz Department. In particular, focus is on how the compensation and consultation frameworks debilitated opposition to the project. We conclude that the governments priorities are intertwined with the continuation of the extractive economic model. In these circumstances questioning extractive projects is not an option.

An Empirical Contribution to the Debate on Corruption, Democracy and Environmental Policy

Both theoretical and empirical studies have shown that democracy and corruption have substantial influence on environmental policy. In this paper, we empirically analyse whether both democracy and corruption are equally important determinants. When these variables are jointly included as explanatory variables, we find that corruption stands out as an important determinant of environmental policies, while democracy has a very limited impact. Further on, we discuss our results in the context of the Environmental Kuznets Curve literature. We argue that institutional disarray that plagues developing countries will make it problematic for them to have increasing environmental policy stringency combined with increasing incomes. Finally, and more optimistically, when we consider our results in the context of institutions and growth, we conclude that there is a possibility of reaching a double dividend. Reductions in corruption would induce both higher growth rates and stricter environmental policies. Thus, institutional improvement is an extremely valuable step in achieving sustainable development.

Planning and Natural Resources in Bolivia Between Rules without Participation and Participation without Rules

This article focuses on participation in the main planning documents produced in Bolivia in the first decade of the 2000s: the Poverty Reduction Strategy Paper (PRSP) and the National Development Plan (PND). We analyze how these planning instruments have been able to capture popular participation through diverse mechanisms and how these practices fit in the current mainstream participation discourse. Special attention is paid to natural resources because of the predominant role they have in the Bolivian economy and because of their substantial contribution to the state budget. The Bolivian experience reflects an apparent paradox: While the process leading to the PRSP followed participatory guidelines and the PND did not, the resulting PRSP failed to include the most pressing demands of social movements, while the PND succeeded in including them. This case shows how the articulation of political processes escapes simplistic characterizations and how the application of “out of the textbook” participation may result in highly exclusionary outcomes. It also shows that the voice of social movements can take unexpected paths and have a profound influence on political events that go well beyond the possibility of standardized participatory processes.

The Effect of Corruption on Growth and Its Transmission Channels

Through growth regression analysis, we estimate the direct effect of corruption on economic growth and the indirect transmission channels, specifically, investments, trade policy , schooling , and political violence . We find that one-standard deviation increase in the corruption index is associated with a substantial decrease in economic growth. The most important channels through which corruption effects economic growth are investment , followed by schooling and trade openness.

The Rule of the Jungle in Pakistan: A Case Study on Corruption and Forest Management in Swat

Corruption in the forest sector of Swat, Pakistan is impairing the sustainable management of forest. We analyze corruption in a case study setting against the backdrop of the reform options that are most often cited as possible solutions. As we highlight in this study, the ‘crime and punishment’ approach is not feasibly implemented if the overall institutional environment is weak. Since countrywide overhaul of corruption through sweeping reform programs, the other reform approach, is a difficult and lengthy task, there is a need for an alternative kind of reform. In the case of a corruption-ridden centralised forest management regime, institutional reform should move away from enforcement of existing institutions and promote communal management of natural resources by locals.

Land reform in Bolivia: The forestry question

In this paper we discuss forestry issues related to land reform in Bolivia. We find that although the current land reform satisfies most of the conditions that are necessary for adequately addressing development issues in the agrarian sector, it does not deal with many of the challenges related to forest management and actually contains provisions that come in conflict with the objectives of sustainable forest management. Given that a large part of the land that is being titled is actually forest land, the above mentioned omission and conflict with the objectives of sustainable forest management is critical and may have harmful ramifications for the preservation of forest resources as well as poverty alleviation of forest-dependent communities.