Effects of corruption on performance: Evidence from the UN-REDD Programme

- Dynamic game models are used to analyze the effect of corruption on REDD programs.
- Increase in corruption leads to a decrease in an investment in the REDD programs.
- Increased UN-REDD expenditures can improve the performance of REDD programs.
- The diffusion of corruption will to some extent inhibit the REDD program investment.

Corruption is one of the major challenges to the effectiveness of REDD programs and should be addressed. In this paper we use a dynamic game model to analyze the effects of corruption on the performance of REDD programs, and on the benefits to stakeholders. Using panel data from 2010 to 2013 of 11 partner countries of the UN-REDD Programme countries, relationships between corruption and performance in REDD programs are empirical analyzed. Empirical results confirm that an increase in the degree of corruption may lessen emissions reduction, leading to a decrease in an investment in the REDD program. Following from this analysis, this paper proposes to: (i) establish a credible, transparent, and efficient governance structure, (ii) develop a fair and transparent benefit-sharing mechanism, as well as (iii) use a market mechanism in REDD programs to avoid corruption.