Institutions and deforestation in the Brazilian amazon: a geographic regression discontinuity analysis
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- Master Thesis 
This study explores the impact of institutional quality at the municipal level on deforestation in the Legal Amazon. We add to this insufficiently understood topic by implementing a geographic regression discontinuity design. By taking advantage of high-resolution spatial data on deforestation combined with an objective measure of corruption used as a proxy for institutional quality, we analyse 138 Brazilian municipalities in the period of 2002-2004. Our empirical findings show no causal effect of institutional quality on deforestation, suggesting that other unobserved factors are more important drivers of deforestation. A supplementary analysis indicates that location is a vital underlying factor in the interplay between deforestation and institutional quality. However, further research is needed to establish inference with respect to the relationship between deforestation, institutional quality and location.