[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/srt/wpaper/1016.html
   My bibliography  Save this paper

Green licenses and environmental corruption: a random matching model

Author

Listed:
  • Angelo Antoci

    (University of Sassari, Italy)

  • Simone Borghesi

    (University of Siena, Italy)

  • Gianluca Iannucci

    (University of Florence, Italy)

Abstract
This paper studies environmental corruption via a random matching evolutionary game between a population of firms and a population of bureaucrats who have to decide whether to release a “green” license to the firms. A firm obtains the license if the bureaucrat checks that it complies with environmental regulations, otherwise it is sanctioned. The model assumes that there are two types of bureaucrats (honest and dishonest), two types of firms (compliant and non-compliant), and two possible crimes (corruption and extortion). Corruption occurs when a dishonest bureaucrat accepts a bribe from a non-compliant firm, while extortion occurs when a dishonest bureaucrat claims a bribe from a compliant firm. When there is no dominance of strategies, we show that there exist two bistable regimes, in which two attractive stationary states exist, and two regimes with an internal stable equilibrium, corresponding to the mixed strategy Nash equilibrium of the one-shot static game, surrounded by closed trajectories. From comparative statics analysis performed on the latter two dynamic regimes, it emerges that policy instruments may help the Public Administration reduce both corruption and extortion, although increasing sanctions and detection probability do not always get the desired results.

Suggested Citation

  • Angelo Antoci & Simone Borghesi & Gianluca Iannucci, 2016. "Green licenses and environmental corruption: a random matching model," SEEDS Working Papers 1116, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Nov 2016.
    • Handle: RePEc:srt:wpaper:1016
    as

    Download full text from publisher

    File URL: http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1016.pdf
    File Function: First version, 2016
    Download Restriction: no
    File URL: http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1016.pdf
    File Function: Revised version, 2016
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brander, James A & Taylor, M Scott, 1998. "The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use," American Economic Review, American Economic Association, vol. 88(1), pages 119-138, March.
    2. Angelo Antoci & Alessandro Fiori Maccioni & Paolo Russu, 2016. "The Ecology of Defensive Medicine and Malpractice Litigation," PLOS ONE, Public Library of Science, vol. 11(3), pages 1-15, March.
    3. Toke S. Aidt, 2009. "Corruption, institutions, and economic development," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 25(2), pages 271-291, Summer.
    4. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    5. J. Barkley Rosser, 2011. "Complex Evolutionary Dynamics in Urban-Regional and Ecologic-Economic Systems," Springer Books, Springer, number 978-1-4419-8828-7, June.
    6. Rogerson, Richard & Shimer, Robert, 2011. "Search in Macroeconomic Models of the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 7, pages Pages: 61, Elsevier.
    7. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    8. Lorenzo Pellegrini & Reyer Gerlagh, 2004. "Corruption's Effect on Growth and its Transmission Channels," Kyklos, Wiley Blackwell, vol. 57(3), pages 429-456, August.
    9. Giuseppe Vita, 2007. "A note on exogenous changes in incentives for and deterrence of corruption," European Journal of Law and Economics, Springer, vol. 24(1), pages 15-27, August.
    10. D’Amato, Alessio & Mazzanti, Massimiliano & Nicolli, Francesco, 2015. "Waste and organized crime in regional environments," Resource and Energy Economics, Elsevier, vol. 41(C), pages 185-201.
    11. Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March.
    12. Matthew A. Cole & Robert J. R. Elliott & Per G. Fredriksson, 2006. "Endogenous Pollution Havens: Does FDI Influence Environmental Regulations?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 157-178, March.
    13. Han, Lu & Strange, William C., 2015. "The Microstructure of Housing Markets," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 813-886, Elsevier.
    14. O. Ashenfelter & D. Card (ed.), 2011. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 4, number 4.
    15. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    16. Méon, Pierre-Guillaume & Weill, Laurent, 2010. "Is Corruption an Efficient Grease?," World Development, Elsevier, vol. 38(3), pages 244-259, March.
    17. Fredriksson, Per G. & List, John A. & Millimet, Daniel L., 2003. "Bureaucratic corruption, environmental policy and inbound US FDI: theory and evidence," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1407-1430, August.
    18. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
    19. O. Ashenfelter & D. Card (ed.), 2011. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 4, number 5.
    20. Damania, Richard & Fredriksson, Per G. & List, John A., 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 490-512, November.
    21. Luciano Andreozzi, 2004. "Rewarding Policemen Increases Crime. Another Surprising Result from the Inspection Game," Public Choice, Springer, vol. 121(1), pages 69-82, October.
    22. Daron Acemoglu & Simon Johnson & James A. Robinson, 2012. "The Colonial Origins of Comparative Development: An Empirical Investigation: Reply," American Economic Review, American Economic Association, vol. 102(6), pages 3077-3110, October.
    23. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    24. Feng Dong & Pengfei Wang & Yi Wen, 2016. "Credit search and credit cycles," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(2), pages 215-239, February.
    25. Welsch, Heinz, 2004. "Corruption, growth, and the environment: a cross-country analysis," Environment and Development Economics, Cambridge University Press, vol. 9(5), pages 663-693, October.
    26. Debora Di Gioacchino & Maurizio Franzini, 2008. "Bureaucrats’ corruption and competition in public administration," European Journal of Law and Economics, Springer, vol. 26(3), pages 291-306, December.
    27. Cole, Matthew A., 2007. "Corruption, income and the environment: An empirical analysis," Ecological Economics, Elsevier, vol. 62(3-4), pages 637-647, May.
    28. Axel Dreher & Thomas Herzfeld, 2005. "The Economic Costs of Corruption: A Survey and New Evidence," Public Economics 0506001, University Library of Munich, Germany.
    29. Ross Cressman & Jean-Francois Wen & William Morrison, 1998. "On the Evolutionary Dynamics of Crime," Canadian Journal of Economics, Canadian Economics Association, vol. 31(5), pages 1101-1117, November.
    30. Nuno Garoupa, 1997. "The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-295, September.
    31. Fredriksson, Per G. & Svensson, Jakob, 2003. "Political instability, corruption and policy formation: the case of environmental policy," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1383-1405, August.
    32. Tim Friehe, 2008. "Correlated payoffs in the inspection game: some theory and an application to corruption," Public Choice, Springer, vol. 137(1), pages 127-143, October.
    33. Angelo Antoci & Pier Sacco, 1995. "A public contracting evolutionary game with corruption," Journal of Economics, Springer, vol. 61(2), pages 89-122, June.
    34. repec:bla:jecsur:v:11:y:1997:i:3:p:267-95 is not listed on IDEAS
    35. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    36. Lui, Francis T, 1985. "An Equilibrium Queuing Model of Bribery," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 760-781, August.
    37. Tsebelis, George, 1989. "The Abuse of Probability in Political Analysis: The Robinson Crusoe Fallacy," American Political Science Review, Cambridge University Press, vol. 83(1), pages 77-91, March.
    38. Mauro, Paolo, 1998. "Corruption and the composition of government expenditure," Journal of Public Economics, Elsevier, vol. 69(2), pages 263-279, June.
    39. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    40. Panayotou T., 1993. "Empirical tests and policy analysis of environmental degradation at different stages of economic development," ILO Working Papers 992927783402676, International Labour Organization.
    41. Holler, Manfred J, 1993. "Fighting Pollution When Decisions Are Strategic," Public Choice, Springer, vol. 76(4), pages 347-356, August.
    42. Thierry Verdier & Daron Acemoglu, 2000. "The Choice between Market Failures and Corruption," American Economic Review, American Economic Association, vol. 90(1), pages 194-211, March.
    43. Shafik, Nemat & Bandyopadhyay, Sushenjit, 1992. "Economic growth and environmental quality : time series and cross-country evidence," Policy Research Working Paper Series 904, The World Bank.
    44. Lopez, Ramon & Mitra, Siddhartha, 2000. "Corruption, Pollution, and the Kuznets Environment Curve," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 137-150, September.
    45. Gilles Duranton & J. V. Henderson & William C. Strange (ed.), 2015. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 5, number 5.
    46. Blackburn, Keith & Bose, Niloy & Emranul Haque, M., 2006. "The incidence and persistence of corruption in economic development," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2447-2467, December.
    47. Esther Blanco & Javier Lozano, 2015. "Ecolabels, uncertified abatement, and the sustainability of natural resources: an evolutionary approach," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 623-647, July.
    48. Luciano Andreozzi, 2002. "Oscilliations in the Enforcement of Law: an Evolutionary Analysis," Homo Oeconomicus, Institute of SocioEconomics, vol. 18, pages 403-428.
    49. Kijima, Masaaki & Nishide, Katsumasa & Ohyama, Atsuyuki, 2010. "Economic models for the environmental Kuznets curve: A survey," Journal of Economic Dynamics and Control, Elsevier, vol. 34(7), pages 1187-1201, July.
    50. Alessio D'Amato & Mariangela Zoli, 2012. "Illegal waste disposal in the time of the mafia: a tale of enforcement and social well being," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(5), pages 637-655, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Angelo Antoci & Simone Borghesi & Gianluca Iannucci, 2021. "(Dis)honest bureaucrats and (non)compliant firms in an evolutionary game," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 321-344, May.
    2. Arminen, Heli & Menegaki, Angeliki N., 2019. "Corruption, climate and the energy-environment-growth nexus," Energy Economics, Elsevier, vol. 80(C), pages 621-634.
    3. Bin Dong & Benno Torgler, 2010. "The Consequences of Corruption: Evidence from China," Working Papers 2010.73, Fondazione Eni Enrico Mattei.
    4. Bin Dong & Benno Torgler, 2010. "The Consequences of Corruption: Evidence from China," Working Papers 2010.73, Fondazione Eni Enrico Mattei.
    5. Ren, Yi-Shuai & Ma, Chao-Qun & Apergis, Nicholas & Sharp, Basil, 2021. "Responses of carbon emissions to corruption across Chinese provinces," Energy Economics, Elsevier, vol. 98(C).
    6. Salvatore Bimonte & Arsenio Stabile, 2019. "The Effect of Growth and Corruption on Soil Sealing in Italy: A Regional Environmental Kuznets Curve Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(4), pages 1497-1518, December.
    7. Leitão, Alexandra, 2010. "Corruption and the environmental Kuznets Curve: Empirical evidence for sulfur," Ecological Economics, Elsevier, vol. 69(11), pages 2191-2201, September.
    8. Hanousek, Jan & Shamshur, Anastasiya & Tresl, Jiri, 2019. "Firm efficiency, foreign ownership and CEO gender in corrupt environments," Journal of Corporate Finance, Elsevier, vol. 59(C), pages 344-360.
    9. Andrew Hodge & Sriram Shankar & D. S. Prasada Rao & Alan Duhs, 2011. "Exploring the Links Between Corruption and Growth," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 474-490, August.
    10. Toke S. Aidt, 2011. "Corruption and Sustainable Development," Chapters, in: Susan Rose-Ackerman & Tina Søreide (ed.), International Handbook on the Economics of Corruption, Volume Two, chapter 1, Edward Elgar Publishing.
    11. Toke S. Aidt, 2009. "Corruption, institutions, and economic development," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 25(2), pages 271-291, Summer.
    12. Miao Zhang & Houli Zhang & Li Zhang & Xu Peng & Jiaxuan Zhu & Duochenxi Liu & Shibing You, 2023. "Corruption, anti-corruption, and economic development," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    13. Maurizio Lisciandra & Carlo Migliardo, 2017. "An Empirical Study of the Impact of Corruption on Environmental Performance: Evidence from Panel Data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 297-318, October.
    14. Dzhumashev, Ratbek, 2014. "Corruption and growth: The role of governance, public spending, and economic development," Economic Modelling, Elsevier, vol. 37(C), pages 202-215.
    15. Bienvenido Ortega & Antonio Casquero & Jesús Sanjuán, 2016. "Corruption and Convergence in Human Development: Evidence from 69 Countries During 1990–2012," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 691-719, June.
    16. Dwiputri, Inayati Nuraini & Arsyad, Lincolin & Pradiptyo, Rimawan, 2018. "The corruption-income inequality trap: A study of Asian countries," Economics Discussion Papers 2018-81, Kiel Institute for the World Economy (IfW Kiel).
    17. Wang, Shuhong & Zhao, Danqing & Chen, Hanxue, 2020. "Government corruption, resource misallocation, and ecological efficiency," Energy Economics, Elsevier, vol. 85(C).
    18. Panteli Maria & Delipalla Sofia, 2022. "The Impact of Institutions on Economic and Environmental Performance: Evidence From Europe," South East European Journal of Economics and Business, Sciendo, vol. 17(2), pages 125-141, December.
    19. Oluremi Ogun, 2018. "Corruption And Growth: The Productivity Growth Nexus," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1227-1244, December.
    20. Román-Aso, Juan A. & Bellido, Héctor & Olmos, Lorena, 2024. "Does corruption pollute the wheel? An analysis for OECD countries," Ecological Economics, Elsevier, vol. 223(C).

    More about this item

    Keywords

    Bureaucratic corruption; Evolutionary games; Environmental regulations; Economics of crime;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:srt:wpaper:1016. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alessandro Palma (email available below). General contact details of provider: http://www.sustainability-seeds.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.