Is corruption an input material for environmental pollution?

Abstract

This study examines the impact of corruption on environmental quality, covering aspects such as climate change, environmental health, air quality, sanitation and drinking water, heavy metals, and waste management across 163 countries from 2005 to 2020. We utilize a spatial autoregressive (SAR) model for panel data to analyse the spatial dependencies among these environmental quality indicators. Our findings highlight several key insights. First, there are spatial spillover effects in regional environmental quality, particularly concerning climate change, air quality, and waste management. Second, a country's environmental quality is influenced not only by its own corruption control measures but also by those of its neighbouring countries. Finally, our analysis identifies variations across different income groups: while control of corruption significantly and positively impacts environmental quality in high‐income and medium‐income countries, its effect is positive but statistically insignificant in low‐income countries. These results emphasize the need for tailored environmental policies for each income group and environmental aspect.