Journal of Natural Environment

Investigating the effect of shadow economy, corruption and rule of law on environmental pollution in selected developing oil countries

Document Type : Research Paper

Authors

Department of Economics, Faculty of Economics and Social Sciences, Shahid Chamran University of Ahvaz, Khuzestan, Iran.

10.22059/jne.2024.375593.2661

Abstract

Environmental pollution is one of the most important problems that most developing countries face today, which in addition to environmental problems has negative economic and social consequences. Studies show that the shadow economy and institutional factors can be influential factors on the quality of the environment in developing countries, and few studies have been conducted on the effect of these factors on environmental pollution at the same time. The shadow economy occupies a large part of the economy of developing countries, which can affect the quality of the environment, and institutional factors can affect the quality of the environment through different channels, such as controlling and influencing the shadow sector. Therefore, the current research has been conducted with the aim of investigating the effective factors of environmental pollution in oil developing countries. Using the panel data model and the generalized least squares method for the period of 2009-2020, the results have shown that the shadow economy and the rule of law directly increase pollution and the interaction effect of the rule of law and the shadow economy has led to a reduction in pollution; Therefore, it can be expected that by controlling the shadow sector, increasing the rule of law will lead to a reduction in pollution. Also, the results have shown that corruption control has directly reduced pollution and the interaction effect of rule of law and corruption control has led to a reduction in pollution. Therefore, controlling corruption and increasing the rule of law at the same time plays an important role in reducing pollution in oil countries. Also, the results confirm the hypothesis of Kuznets for the group of oil developing countries at the beginning of the development path.

Keywords

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Journal of Natural Environment
Volume 77, Issue 2
August 2024
Pages 299-309