The Effect of Government Size on Environmental Quality in Petroleum Exporting Countries

The main goal of this article is to investigate the effect of government size on environmental quality of the petroleum exporting countries over the years 1996-2010. For this purpose, a model based on Bernauer and Koubi's idea has been presented simultaneously taking Kuznets theory into consideration. Parameters were estimated employing panel data approach. In this study, the emitted CO2 was considered as a function of economic variables (real GDP per capita, investment share of real GDP and degree of openness to trade) and political variable (control of corruption index), and finally government size variable. Results show that at low-income levels, there is a direct correlation between GPD per capita and the emission of CO2 and Kuznets theory also applies between GPD per capita and emitted CO2. Moreover, there is a direct relationship between the degree of openness to trade and environmental pollution. Investment share and control of corruption index have inverse relationship with CO2 emission. Finally, there is a direct correlation between the size of government and the CO2 emission.