Public sector transparency and countries’ environmental performance: A nonparametric analysis

• We develop conditional directional distance functions.
• Countries’ conditional environmental performances are constructed.
• The relationship between transparency and environmental performance is examined.

Based on the theoretical background of the link between countries’ public sector transparency and environmental policy, our paper provides empirical evidence for a sample of 49 countries for the time period of 1995–2000. Assuming that countries’ environmental performance is a product of their environmental regulations and policies, we utilize a nonparametric estimator for investigating the link with public sector's transparency levels. Specifically, by applying conditional directional distance function models, we incorporate on the measurement of countries’ environmental performance the effect of their public sector transparency levels. In a second stage analysis applying local constant estimators, the results reveal an inverted ‘U’-shape relationship between countries’ public sector transparency levels and their environmental performance.