Institutions and Environmental Sustainability in Africa: Pathways and Transmission Mechanisms
Keywords:
Economic Institutions, Regulatory Institutions, Environmental Sustainability, Economic Growth, AfricaAbstract
As the African continent wrestles with significant ecological threats alongside its pursuit of economic growth, this study explores how institutional frameworks can drive environmental sustainability. This study collects data for a sample of 33 African countries from 2008 to 2022 from World Governance Indicators, World Economic Freedom Database, Global Footprint database and World Development Indicators Database. Engaging a System GMM methodology, this paper investigates the direct and indirect effects of economic and regulatory institutional frameworks on environmental sustainability in Africa. The results suggest that economic institutions significantly impact environmental sustainability in Africa, with strong persistence of past sustainability levels. Government size and robust legal systems enhance sustainability, while foreign direct investment has negative effects. Regulatory institutions, such as control of corruption and government effectiveness, contribute positively to environmental sustainability. The interaction between economic and regulatory institutions indicates that effective government interventions depend on governance quality. Policymakers therefore should focus on strengthening regulatory frameworks and increasing government involvement in environmental management. Additionally, enhancing public awareness and community engagement is crucial for fostering local initiatives that address environmental challenges and promote resilience.
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