Following on from Tuesday's post on the pollution haven hypothesis, I read this new article by Andreas Kammerlander and Günther Schulze (both University of Freiburg), published in the European Journal of Political Economy (sorry, I don't see an ungated version online). The paper tests the pollution haven hypothesis, but its main focus is the 'cleaner democracy hypothesis' - the idea that democracies are better at protecting the environment. As Kammerlander and Schulze explain:
According to this theory, there are five related causal mechanisms through which democracy leads to a cleaner environment: First, democracies allow a freer flow of information, and, therefore, environmental lobby groups are more effective in informing the population and raising awareness than in autocracies that censor information. Second, democracies protect the rights of civil society through freedom of speech and freedom of association, which makes it easier for environmental interest groups to organize and exert influence on the political process. Third, democracies are more responsive to demands of the electorate as incumbents are more accountable through free elections and environmental interests can seek political representation... Fourth, democracies are more cooperative and tend to honor environmental agreements as they are bound by the rule of law... Fifth, the members of the ruling elite in autocracies are less inclined towards environmental protection than the democratic public as they have a bigger share in the national income and the costs of environmental protection would therefore be higher for them...
They use cross-country data for 137 countries over the period from 1970 to 2012, to test whether there are robust correlations between measures of democracy and ten different pollutants:
These pollutants can be separated into gaseous air pollutants and aerosols. The available gaseous air pollutants are carbon monoxide (CO), nitrogen oxide (NOx), sulfur dioxide (SO2), non-methane volatile organic compounds (NMVOC), and ammonia (NH3). The aerosols in the dataset are black carbon (BC), organic carbon (OC), fine particle matter smaller than 10 μm (PM10), and fine particulates smaller than 2.5 μm (PM2.5), which are further differentiated between those originating from burning fossils and those from organic matter (PM2.5_fossil and PM2.5_bio).
If the cleaner democracy hypothesis is true, then you would expect to find similar effects for all pollutants, or at least not wildly divergent effects. Unfortunately, the news is not good for the hypothesis:
We find no consistent effect of democracy on pollution levels, neither in the regressions with country and time FE [Fixed Effects], nor in the regressions with only time FE. We do not even find that democracy has a consistent positive effect on the environmental quality for richer countries (as well-off citizens could have been hypothesized to be more likely to demand environmental control).
The results are robust (in the sense that alternatives also don't show any discernible pattern) to a battery of different specifications and the inclusions of different variables. They also show results that don't support the pollution haven hypothesis, unlike the paper I discussed on Tuesday, even with the use of various different measures of globalisation and trade intensity.
The problem with this analysis is that there is likely a lot of endogeneity in the regression models. Democracy might have causal effects on pollution, but there might also be other factors that cause both increases in democratic institutions and lower pollution - for instance, state capacity, social capital, or simply cultural differences in preferences for political institutions might be correlated with preferences for environmental quality. Also, there is likely to be a fair degree of multicollinearity in the model, as many of the variables will be correlated with each other. In the pollution haven hypothesis paper I discussed on Tuesday, Faqin Lin used an instrumental variables approach to overcome some of these issues, but that seems more difficult here, unless an instrument that affects democracy but not pollution (or preferences for environmental quality) could be identified. It is challenging but not impossible - this 2003 paper uses religion and socialist tradition, among other variables, as instruments for democracy. Having said that, I think it will be quite challenging, even with a better econometric approach, to revive the cleaner democracy hypothesis.
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