Why are some countries cleaner than others? New evidence from macroeconomic governance

Taner Akan (), Halil İbrahim Gündüz (), Tara Vanlı (), Ahmet Baran Zeren (), Ali Haydar Işık () and Tamerlan Mashadihasanli ()
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Taner Akan: Istanbul University
Halil İbrahim Gündüz: Department of Econometrics, Istanbul University, Beyazıt, 34452
Tara Vanlı: Istanbul University
Ahmet Baran Zeren: Istanbul University
Ali Haydar Işık: Istanbul University
Tamerlan Mashadihasanli: Istanbul University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2023, vol. 25, issue 7, No 16, 6167-6223

Abstract: Abstract This study aims to investigate why some countries are cleaner than the others with reference to macroeconomic governance (MEG) in order to explain how major macroeconomic aggregates should be governed to mitigate environmental pollution at the level of economic systems. Using per capita carbon dioxide emissions (CPC) as the proxy for air pollution, and macro-non-financial governance (MNFG) and macro-financial governance (MFG) as the proxies for MEG, the study introduces the systemic and fragmented governance of green complementarities (GCMs) and dirty complementarities (DCMs) as analytic concepts to compare the MEG models for managing pollution in 13 high-income countries (HICs), 10 upper-middle-income countries (UMICs), and nine lower-middle-income countries (LMICs) for the period 1994–2014. The paper concludes that (i) HICs reduced their CPC levels thanks to adopting green systemic governance by creating GCMs between both MNFG and MFG variables in the long run; (ii) UMICs experienced a remarkable increase in their CPC levels due to adopting dirty systemic governance by creating DCMs between the MNFG variables, but prevented pollution from being higher through creating GCMs between the MFG variables; and (iii) LMICs experienced the highest comparative increase in CPC due to adopting a fragmented governance in managing both MNFG–pollution and MFG–pollution nexus.

Keywords: Pollution; Macroeconomic governance; Complementarities; Growth (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10668-022-02298-3

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