Skip to main content

Advertisement

SpringerLink
Log in

Corruption, illegal trade and compliance with the Montreal Protocol

  • Published:
Environmental and Resource Economics Aims and scope Submit manuscript

Abstract

This paper studies the effects of corruption, rule of law and tariffs on illegal trade in chlorofluorocarbons (CFCs) controlled by the Montreal Protocol. Since data on illegal trade is not available, it is not possible to test any theoretical conclusions about smuggling. The paper, however, attempts to circumvent the problem by developing a model of illegal trade in CFCs that derives predictions about the effects of corruption, rule of law and tariffs on both legal and illegal imports of CFCs. Then the theoretical predictions concerning legal imports are tested using panel data on CFC consumption. Using the estimates of legal imports, inferences about illegal trade are made. The basic findings indicate that knowledge about the degree of rule of law, corruption and the level of tariffs is needed for the correct interpretation of the data on environmental performance reported to international monitoring agencies.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Abbreviations

CFC:

Chlorofluorocarbon

ODS:

Ozone-depleting substance

UNEP:

United Nations Environment Program

ODP:

Ozone-depleting potential

ICRG:

International Country Risk Guide

PRS:

Political Risk Services

CEIT:

Countries with economies in transition

ML:

Maximum Likelihood

OLS:

Odinary Least Squares

LR:

Likelihood Ratio

EU:

European Union

TRAINS:

Trade Analysis and Information System

UNCTAD:

United Nations Conference on Trade and Development

GDP:

Gross domestic product

EIA:

Environmental Investigation Agency

REML:

Restricted Maximum Likelihood

References

  • Baltagi BH (1995) Econometric analysis of panel data. Wiley, New York

    Google Scholar 

  • Benedick RE (1998) Ozone diplomacy: new directions in safeguarding the planet. Harvard University Press, Cambridge, MA

    Google Scholar 

  • Brack D (1996) International trade and the Montreal Protocol. Royal Institute of International Affairs, London

    Google Scholar 

  • Cole MA, Rayner AJ, Bates JM (1997) The environmental Kuznets curve: an empirical analysis. Environ Dev Econ 2:401–416

    Article  Google Scholar 

  • Copeland BR (2001) International trade in waste products in the presence of illegal disposal. In: Batabyal AA, Beladi H (eds) The economics of international trade and the environment. Lewis Publishers, Boca Raton

    Google Scholar 

  • Damania R (2002) Environmental controls with corrupt bureaucrats. Environ Dev Econ 7:407–427

    Article  Google Scholar 

  • Damania R, Fredriksson PG, List JA (2003) Trade liberalization, corruption, and environmental policy formation: theory and evidence. J Environ Econ Manage 46:490–512

    Article  Google Scholar 

  • Damania R, Fredriksson PG, Mani M (2004) The persistence of corruption and regulatory compliance failures: theory and evidence. Public Choice 121:363–390

    Article  Google Scholar 

  • Fredriksson PG, Svensson J (2003) Political instability, corruption and policy formation: the case of environmental policy. J Public Econ 87:1383–1405

    Article  Google Scholar 

  • Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353–377

    Article  Google Scholar 

  • Hsiao C (2003) Analysis of panel data, 2nd ed. Cambridge University Press, New York

    Google Scholar 

  • Kaufmann RK, Davidsdottir B, Garnham S, Pauly P (1998) The determinants of atmospheric SO2 concentrations: reconsidering the environmental Kuznets Curve. Ecol Econ 25:209–220

    Article  Google Scholar 

  • Knack S, Keefer P (1995) Institutions and economic performance: cross-country tests using alternative institutional measures. Econ Polit 7(3):207–227

    Article  Google Scholar 

  • Little RJA (1995) Modeling the drop-out mechanism in repeated-measures studies. J Am Stat Assoc 90(431):1112–1121

    Article  Google Scholar 

  • Lopez R, Mitra S (2000) Corruption, pollution, and the Kuznets environment curve. J Environ Econ Manage 40:13–150

    Article  Google Scholar 

  • Martin L, Panagariya A (1984) Smuggling, trade, and price disparity: a crime theoretic approach. J Int Econ 17:201–217

    Article  Google Scholar 

  • Mookherjee D, Png IPL (1995) Corruptible law enforcers: how should they be compensated? Econ J 105(428):145–159

    Article  Google Scholar 

  • Murdoch JC, Sandler T (1997) The voluntary provision of a pure public good: the case of reduced CFC emissions and the Montreal Protocol. J Public Econ 63:331–349

    Article  Google Scholar 

  • Patterson HD, Thomson R (1971) Recovery of inter-block information when block sizes are unequal. Biometrika 58(3):545–554

    Article  Google Scholar 

  • Pitt MM (1981) Smuggling and price disparity. J Int Econ 11:44–458

    Google Scholar 

  • Rubin DB (1976) Inference and missing data. Biometrika 63(3):581–592

    Article  Google Scholar 

  • Sandler T, Arce MDG (2003) Pure public goods versus commons: benefit-cost duality. Land Econ 79(3):355–368

    Article  Google Scholar 

  • Shafik N (1994) Economic development and environmental quality: an econometric analysis. Oxford Economic Papers, New Series 46, Special Issue on Environ Econ 757–773

  • Shleifer A, Vishny RW (1993) Corruption. Q J Econ 108(3):599–617

    Article  Google Scholar 

  • Swallow WH, Monahan JF (1984) Monte Carlo comparison of ANOVA, MICQUE, REML, and ML estimators of variance components. Technometrics 26(1):47–57

    Article  Google Scholar 

  • United Nations Environment Program (2001) Illegal trade in ozone depleting substances: is there a hole in the Montreal Protocol? OzonAction Program, Division of Technology, Industry and Economics, OzonAction Newsletter Special Supplement, Number 6

Download references

Author information

Authors and Affiliations

  1. Department of Political Science, Vanderbilt University, VU Station B #351817, Nashville, TN, 37235-1817, USA

    Kate Ivanova

Authors
  1. Kate Ivanova
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Kate Ivanova.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Ivanova, K. Corruption, illegal trade and compliance with the Montreal Protocol. Environ Resource Econ 38, 475–496 (2007). https://doi.org/10.1007/s10640-007-9088-5

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10640-007-9088-5

Keywords

Search

Navigation