This would avoid costly local forms of resistance, not to mention the deferring of industrial pollution or forest degradation to future generations.
However, even if corruption reduces pollution via its effect on income, this indirect effect is invariably dominated by the direct effect.
The two types of effect of corruption on pollution may differ in sign.
In this specification, corruption is significant at least at the 5.5 per cent level for all ambient pollution indicators except phosphorus.
The pollution-reducing effect of higher income therefore starts at lower income levels than in the case where corruption is explicitly included.
An interesting question is how the inclusion of corruption affects the per capita income levels at which pollution levels attain their maximum.
Once the pollution control board imposes a tax, the plants have to choose between options.
We have shown how pollution taxes on both goods can affect factor returns, goods' prices, urban unemployment, and social welfare for the economy.
