Deforestation, economic growth and corruption: a nonparametric analysis on the case of Amazon forest

Abstract

This article aims to analyse the relationship between deforestation, corruption and economic growth. We focused our analysis on the Brazilian municipalities situated in the Amazon region. We used the cross-sectional data from 538 municipalities in the Legal Amazon area for the year 2004. We constructed the municipal corruption index based on the objective data delivered by the reports from Controladoria-Geral da União (CGU). We performed a nonparametric analysis, that is, we applied the Generalized Additive Model (GAM). We found statistically significant effects of the economic growth rate on the level of deforestation. However, the corruption seems to have no significant impact. Given the first results, we divided our data and analysed just the data from 25 municipalities from the states Pará and Matogrosso. In the second approach, corruption was statistically significant.

Keywords:

• deforestation
• corruption
• nonparametric regression
• economic growth

JEL Classification:

• C14
• Q23
• Q32

Notes

¹ On practical and theoretical introduction to these models, readers are referred to Wood (2007). The same author has developed the package MGCV to deal with such models; see Wood (2001, 2003, 2004, 2011).