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Corruption, Shadow Economy and Deforestation: Friends Or Strangers?

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Corruption, Shadow Economy and Deforestation: Friends Or Strangers? risks Article Corruption, Shadow Economy and Deforestation: Friends or Strangers? Adeline-Cristina Cozma *, Corina-Narcisa (Bodescu) Cotoc, Viorela Ligia Vaidean and Monica Violeta Achim Faculty of Economics and Business Administration, Babes-Bolyai University, 400591 Cluj-Napoca, Romania; [email protected] (C.-N.C.); [email protected] (V.L.V.); [email protected] (M.V.A.) * Correspondence: [email protected] Abstract: This study aims to reveal the connection between corruption and shadow economy, on one hand, and deforestation, on the other. The research considers 131 countries from all over the world, in the timeframe between the years 2012 and 2020, and it reveals that corruption and shadow economy positively influence deforestation. Determinants like democratic governance quality, press freedom, wood export share, and culture are also key factors in implementing the right, efficient countermeasures aimed at reducing the levels of illegal deforestation and sustainably managing the forestland. The importance of this study is to provide a solid quantitative basis to decision- makers that come across this problem of illegal logging through a better, fact-based understanding of the phenomenon. Keywords: corruption; shadow economy; deforestation; illegal logging; timber mafia; wooden mafia; sustainability Citation: Cozma, Adeline-Cristina, Corina-Narcisa (Bodescu) Cotoc, Viorela Ligia Vaidean, and Monica 1. Introduction Violeta Achim. 2021. Corruption, The need for understanding the factors that determine this serious phenomenon of Shadow Economy and Deforestation: illegal logging is stringent, as climate change has become very real. The carbon dioxide Friends or Strangers? Risks 9: 153. level has increased in a straight line, straight to unsustainability, as a report by NASA https://doi.org/10.3390/risks9090153 (2021) reveals. The most recent official report about the global emissions of greenhouse gas by sector Academic Editor: Mogens Steffensen and sub-sectors was published in 2020 using data from 2016. Received: 29 July 2021 As shown in Figure1, although it may not seem much, deforestation accounts for Accepted: 17 August 2021 2.2% of the total global greenhouse gas emissions. If we rank the most powerful causes, Published: 25 August 2021 deforestation would be at 13th place of all the 27 sub-sectors. Nevertheless, wood is also important because it is the only renewable building material available at the moment. Publisher’s Note: MDPI stays neutral Furthermore, trees remove CO2 from the atmosphere and store it inside (about 50% of the with regard to jurisdictional claims in dry weight of wood is carbon). This is one thing that none of the other sub-sectors can do: published maps and institutional affil- reverse the effect of all others. Moreover, deforestation negatively affects biodiversity by iations. loss of habitat and causes desertification, soil erosion, fewer crops, and flooding. Therefore, these are some grounded reasons why deforestation must be done in a sustainable way and why the fight against illegal logging is extremely important. Having its research targeted on the link between deforestation and corruption, this Copyright: © 2021 by the authors. study aims to reveal the connection between these two, as well as the influence they Licensee MDPI, Basel, Switzerland. have on each other. Shadow economy is also analyzed with respect to deforestation, and This article is an open access article control variables are used in order to obtain accurate results and to identify significant distributed under the terms and determinant factors. conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). Risks 2021, 9, 153. https://doi.org/10.3390/risks9090153 https://www.mdpi.com/journal/risks Risks 2021, 9, 153 2 of 21 Risks 2021, 9, x FOR PEER REVIEW 2 of 20 Figure 1. GlobalGlobal Greenhouse Greenhouse Gas Gas Emissions Emissions by by Sect Sectors.ors. Source: Source: Ritchie Ritchie and and Roser Roser (2020)(2020 )(https: //ourworldindata.org/emissions-by-sector(https://ourworldindata.org/emissions-by-sector)) (accessed (accessed on 9 Auguston 09 Aug 2021). 2021). Most studies that aim to identifyidentify thethe causescauses ofof massivemassive deforestationdeforestation barelybarely discussdiscuss the corruption phenomenon regardingregarding illegalillegal deforestation.deforestation. ThisThis isis anan importantimportant causecause ofof climate change, but it is rarelyrarely approached,approached, asas thethe mediamedia continuescontinues toto displaydisplay shockingshocking stories about the timber mafiamafia and the terrible consequences forfor thosethose thatthat hadhad the courage to speak up against thisthis issue.issue. International specialized research is mostly focused on AmazonAmazon forests,forests, Indonesia,Indonesia, Ghana, Brazil, Brazil, and and Tanzania. Tanzania. However, However, there there are are so somany many other other places places on Earth on Earth with with vir- virgingin or secular or secular forests. forests. For example, For example, Romania Romania has the has largest the largest area of area virgin of virginforests forests in the inwhole the wholeEuropean European Union. Union.They are They home are to a home wide tovariety a wide of varietyspecies of animals species and of animals plants, andincluding plants, carnivores, including carnivores,some of whom some have of whom long havesince long vanished since vanishedfrom Western from WesternEurope. Europe.Much of Muchthese ofprimitive these primitive forests are forests now are threat nowened threatened by illegal by illegaldeforestation. deforestation. But we But were we werewondering wondering how the how bigger the bigger picture picture looks looks like. like.According According to Global to Global Forest Forest Resources Resources As- Assessmentsessment 2020 2020 (FAO (FAO 2020), 2020 ),more more than than half half (54% (54%)) of of the the world’s world’s forests forests is is situated situated in only fivefive countries—the Russian Federation, Brazil,Brazil, Canada,Canada, thethe UnitedUnited StatesStates ofof America,America, andand China, while the rest of thethe worldworld ownsowns onlyonly 46%46% ofof thethe world’sworld’s forests.forests. However, thethe health health of of the the justice justice system system and and the levelthe level of corruption of corruption all over all the over world the isworld at the is veryat the root very of root determining of determining the sustainability the sustainability of exploiting of exploiting this valuable this valuable resource: re- wood.source: While wood. there While is there no official is no official ranking ranking regarding regarding the power the power and size and of size the timberof the timber mafia inmafia each in country, each country, media constantlymedia constantly reveals reve terribleals terrible news about news these about organized these organized networks net- of criminalsworks of criminals from Brazil, from Congo, Brazil, India, Congo, Indonesia, India, Indonesia, and Romania. and Romania. The phenomenon The phenomenon is huge: halfis huge: of all half Romanian of all Romanian timber is timber illegally is harvested.illegally harvested. Those who Those cross who the cross timber the mafia timber or attemptmafia or to attempt enforce to Romania’s enforce Romania’s forest laws forest are targeted laws are for targeted retribution. for retribution. According According to a report by Ritchie and Roser(2021), from 57% forestland (6 billion hectares out of 10.6 in total) to a report by Ritchie and Roser (2021), from 57% forestland (6 billion hectares out of 10.6 10,000 years before present time, to 52% in 1700, to 44% in 1950, and to 38% (4 billion) in in total) 10,000 years before present time, to 52% in 1700, to 44% in 1950, and to 38% (4 2018, the forestland has been decreasing severely, as the sources of pollution have become billion) in 2018, the forestland has been decreasing severely, as the sources of pollution more and more destructive. The loss of forests, on the one hand, and the exponential have become more and more destructive. The loss of forests, on the one hand, and the multiplication of pollution sources, on the other hand, are two significant forces that act in exponential multiplication of pollution sources, on the other hand, are two significant the same direction: the destruction of the environment. forces that act in the same direction: the destruction of the environment. The outline of this study is presented as follows: the paper begins with summarizing The outline of this study is presented as follows: the paper begins with summarizing the most relevant researches on corruption in terms of illegal logging. The variables the most relevant researches on corruption in terms of illegal logging. The variables used used and the types of statistical analysis made are described in the methodology section, and the types of statistical analysis made are described in the methodology section, fol- followed by the results and discussions. Then, conclusions are drawn, as well as limitations lowed by the results and discussions. Then, conclusions are drawn, as well as limitations of the research and future work. of the research and future work. Risks 2021, 9, 153 3 of 21 2. Literature Review Studies on this topic are quite few, as the bibliometric review in Table1 shows. The overwhelming majority of them are descriptive researches, based on interviews, focus groups, or
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