Impact of institutional quality on sustainable development: Evidence from developing countries. (15th November 2021)

• Record Type: Journal Article
• Authors: Azam, Muhammad; Hunjra, Ahmed Imran; Bouri, Elie; Tan, Yan; Al-Faryan, Mamdouh Abdulaziz Saleh
• Is Part Of: Journal of environmental management. Volume 298(2021)
• Publication Date: 2021-11-15
• Subjects: Institutional quality -- Sustainable development -- Augmented endogenous sustainable growth framework -- Developing countries; Environmental policy -- Periodicals; Environmental management -- Periodicals; Environment -- Periodicals; Ecology -- Periodicals; 363.705
• DOI: 10.1016/j.jenvman.2021.113465
• Languages: English
• ISSNs: 0301-4797

Abstract

Abstract: Efficient environmental resource management is a serious concern for sustainable development in developing countries. This study determines the impact of institutional quality on sustainable development, based on total factor productivity improvements through the environmental regulatory process by way of abatement policies using an augmented endogenous sustainable growth model. Based on panel data covering 66 developing countries from 1984 to 2019, the employed methods involve the fixed effects and the system generalized method of moments (GMM). The main results indicate that institutional quality has a positive impact on sustainable development. Institutional quality has a more positive role in sustainable development in lower middle-income countries than low-income countries. The overall results indicate that the disaggregated performance of institutional quality variables is higher in lower middle-income countries than low-income countries. Two main policy implications are implied by our analyses: legislative backing in the form of institutional enforcement is mandatory to design efficient and productive policy relevant to environmental resource management; and various institutional forms should be considered when designing environmental resource protection policy from an environmental governance point of view. Highlights: Institutional quality plays a key role in sustainable development. Efficient environmental resource management is essential for sustainability. Institutions positively impact sustainability through total factor productivity. Institutions plays a bigger role in lower middle-income countries.