The Effect of Corruption on Environmental Quality

The aim of this study is to investigate the corruption’s effect on environmental pollution with emphasis on Coase theorm. The panel data and random effects model are used to analyze the middle-income countries data between 2002 and 2011. The amount of co2 has been chosen as the air pollution’s index and quality of environment, since it is considered to be the most important greenhouse gas. The reason for choosing the middle-income countries is due to the fact that the corruption level in these countries is more than high- income developed countries. Other control variable is also used in this study, such as; trade liberalization, energy consumption, and industry situation and urbanization growth. According to the results, corruption has a significant negative effect on environment through the emission of co2. The impact of industrialization and trade on the quality of the environment, depending on the energy variable, yields different results, therefore, in general, it can¬ not be commented on the significance level. More energy consumption will result in more pollution. Urbanization growth has a positive significant effect on environment through the reduction of co2 emission.