Leading the blind A cross-country analysis of the effect of transparency on environmental performance

Abstract: The aim of this thesis was to investigate whether government transparency has an independent effect on environmental performance. Transparency is being promoted by policymakers and international institutions alike as a key feature of good governance with the potential to enhance environmental performance. The question that remains is whether transparency alone can reach these ambitious objectives, or if enabling factors are needed to enhance the effect of transparency. This thesis investigated the direct effect of transparency but also whether it can be said to have an indirect effect by decreasing corruption, an issue which is known for its negative impacts on environmental performance. This thesis employed principal-agent theory, which is the main theoretical explanation for the alleged success of transparency. To investigate whether transparency is more efficient with enabling factors in place three such enabling factors were suggested that might enhance the effect of transparency by empowering potential principals with information. These factors were a strong civil society, an educated population and openness to trade. The method used was a large-N cross-country statistical investigation, employing Ordinary Least Squares Regressions to examine the relationship between government transparency and environmental performance. Interactions were subsequently included to investigate the potential effect of enabling factors. The results can be summarized in three main points. First, the result suggest that transparency does not have an independent effect on environmental performance. Second, the enabling factors suggested do not possess the strength to generate an effect and third, the hypothesis regarding the indirect effect receives some support.