The Relationship between Economic Sanctions, Corruption and Environmental Quality

Environmental quality plays an important role in human health and the social and economic status of society. One of the challenges facing the government in achieving sustainable development goals is increasing pollution and climate changes. This paper examines the effects of sanctions and corruption on the quality of the environment in Iran. Following the sanctions, the government is forced to change the resource allocation pattern and essential spending replace those related to the development of economic infrastructure and the protection of natural resources, whereby the quality of the environment is influenced. Sanctions also provide rent-seeking opportunities for interest groups due to trade restrictions, and ultimately lead to the spread of illegal activities and economic corruption. The results from partial least squares structural equation model from the period 1996 to 2021 show that first, economic sanctions have had a negative and significant effect on environmental quality by limiting economic capacities and changing the economic priorities of the government. Second, the spread of economic corruption has damaged environmental quality and has had a significant effect on increasing environmental pollutions. Third, sanctions through the channel of corruption have led to environmental destruction, so that environmental quality in Iran has been directly and indirectly affected by economic sanctions. The findings of the paper indicate that environmental degradation is a multidimensional phenomenon that is simultaneously affected by political and institutional factors, and accordingly, its solution is related to improving institutional quality and removing political obstacles. The results of the paper point to the multidimensional nature of the environmental quality issue, based on which various economic and political factors such as political corruption, government quality, and sanctions influence it.