Rent-seeking under a weak institutional environment

Infante, Davide; Smirnova, Janna

doi:10.1016/j.econlet.2009.04.022

Cited by 24 publications

(17 citation statements)

References 6 publications

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“…The results demonstrate that market economy countries are described by the ETKC, which is strongly influenced by enforcement of the rule of law. Former transition countries have not yet reached the turning point of the curve, and this probably reflects less stringent institutional context [52], hindering full implementation of policies aimed to achieve sustainable development.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

Is There Any Evidence on the Existence of an Environmental Taxation Kuznets Curve? The Case of European Countries under Their Rule of Law Enforcement

2014

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Abstract:The paper gives new insights into the environmental taxation policy, demonstrating the existence of an inverse U-shaped relationship between environmental taxation and income in European countries. Our findings reveal this relationship to be influenced by enforcement of the rule of law, which contributes to shifting the turning point on the curve to lower income levels. We show that former transition economies have not reached the turning point due to weak institutions. To achieve the goal of sustainable development, the European Environment Agency's Environmental Taxation Reform, proposing to shift taxation from "goods" to "bads", should be accompanied by effective enforcement or the rule of law. The heterogeneity found between market-based and former transition European countries demonstrates the existence of problems at the EU-level in the coordination of environmental policies and enforcing the rule of law. In addition, the analysis of the determinants of environmental taxation points to the importance of factors related to consumption and production, governance, environmental quality, oil price shocks and the shift of environmental policy in European countries.

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Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

Is There Any Evidence on the Existence of an Environmental Taxation Kuznets Curve? The Case of European Countries under Their Rule of Law Enforcement

2014

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“…Finally, economic openness [17] and flexible state policies [18] are proved to incentivise the adoption of environmental technologies. Other studies analyze the diffusion of new environmental technologies and the level of pollution in relation to persisting rent-seeking activities and the corruption of economic agents [19][20][21].…”

Section: Related Literaturementioning

confidence: 99%

Environment and economic growth: is the rule of law the go-between? The case of high-income countries

2015

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Background: The links between pollution, institutions, and economic growth may be not so univocal as argued in the literature, as these factors may influence each other since some reverse causality may exist between them. The understanding of this relationship is important for identifying appropriate policies for sustainable development. Methods: We investigate the long-run relationship between pollution, institutions, and economic growth, considering as variables carbon dioxide emissions, rule of law, and income. The model offers an analysis of causality direction using a panel-VAR approach for the period 1996-2010 for 33 high-income countries that include advanced, emerging, and former-transition economies.Results: The results demonstrate a positive reverse causality relationship between the rule of law and income, indicating that higher income implies stronger rule of law and vice versa. The rule of law is found to have a negative relationship with pollution, confirming that the enforcement of rules is "a conditio sine qua non" to control emissions. No causality relationship is found for pollution and income that can be due to the different stages of economic development of emerging, former-transition, and developed economies, implying heterogeneity in their environmental protection policies. Conclusions: We argue that the rule of law matters both for economic growth and environment, working as a go-between and creating a win-win situation, where stronger institutions increase the levels of income and vice versa. In order to enhance sustainable development, a policy maker should allocate additional resources for both monitoring the application of the rule of law and its enforcement.

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“…Infante and Smirnova (2009) demonstrate that in weaker institutional environments, rent-seeking bureaucrats can help improve the productivity of entrepreneurs. Similarly, De Vaal and Ebben (2011) suggest that when the initial quality of institutions is below a certain threshold, bureaucratic corruption facilitates economic performance, as it takes on the role of institutions.…”

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confidence: 99%

Bribery environments and firm performance: Evidence from CEE countries

Hanousek

Kochanova

2016

European Journal of Political Economy

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We examine the relation between bureaucratic corruption and firm performance in CEE countries. We show that divergent consequences of corruption found in previous studies can be explained by the specifics of the local bribery environment in which firms operate.A higher mean bribery is associated with lower firm performance, while higher dispersion of individual firm bribes appears to facilitate it. We also conduct a detailed analysis by firm sector and size, and countries' institutional environments.

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Rent-seeking under a weak institutional environment

Cited by 24 publications

References 6 publications

Is There Any Evidence on the Existence of an Environmental Taxation Kuznets Curve? The Case of European Countries under Their Rule of Law Enforcement

Is There Any Evidence on the Existence of an Environmental Taxation Kuznets Curve? The Case of European Countries under Their Rule of Law Enforcement

Environment and economic growth: is the rule of law the go-between? The case of high-income countries

Bribery environments and firm performance: Evidence from CEE countries

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