The short-run and long-run effects of corruption control and political stability on forest cover

- We estimate the effects of governance on forest cover in developing countries.
- Corruption control has a negative and significant effect on forest cover.
- The effect of corruption control on forest cover is larger in the short run than the long run.
- Political stability has a positive and significant effect on forest cover in the short run.
- The long run effect of political stability on forest cover is only significant through the cropland expansion channel.

This article examines how governance, particularly corruption control and political stability, affects deforestation due to agricultural land expansion. We estimate the short-run and long-run effects of corruption control and political stability on deforestation in South American and Asian countries using data from 1990 to 2003 where converting forest land into agricultural land is a significant problem. Political stability has a positive and significant effect on forest cover in the short run but an insignificant effect in the long run. In contrast, corruption control has a negative and significant effect on forest cover in the short run and the long run with a larger magnitude in the former. One possible explanation is that corruption control induces more technological productivity and, if technology and land use are complements, increases in technological development lead to agricultural land expansion.