Institutional Quality and Climate Vulnerability: Empirical Evidence from GCC Economies

Abdulrahman A. Albahouth and Muhammad Tahir ()
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Abdulrahman A. Albahouth: Department of Economics, College of Business and Economics, Qassim University, Buraydah 51452, Saudi Arabia
Muhammad Tahir: Department of Economics, Abbottabad Campus, COMSATS University Islamabad, Abbottabad 22060, Pakistan

Sustainability, 2025, vol. 17, issue 5, 1-19

Abstract: In recent years, the intersection of institutional quality and climate vulnerability has emerged as a critical yet largely untapped area of study, despite its profound implications for understanding resilience to environmental challenges and sustainable development. The purpose of this paper is to establish a relationship between the quality of domestic institutions and climate vulnerability in the case of “Gulf Cooperation Council (GCC)” economies. Annual data spanning the period 2002–2021 were sourced from the “World Governance Indicators (WGI)”, “World Development Indicators (WDI)”, and the “Notre Dame Global Adaptation Initiative (ND-GAIN)”, providing a valuable trace of examined variables. We have applied several econometric techniques including the “Pooled Least Squares (PLS)”, “Fixed Effects (FET)”, “Feasible Generalized Least Squares (FGLS)”, and “Two Stages Least Squares (2SLS)” to estimate the specified models and extract results. Our findings indicate that enhanced institutional quality significantly reduces climate vulnerability in GCC economies. In other words, effective climate governance practices in GCC countries have successfully mitigated climate vulnerability across these economies. The causality analysis confirmed the one-way causality running from institutional quality towards climate vulnerability. On the other hand, increased income level, urbanization, and the degree of trade openness are the major threats as their impacts on climate vulnerability are positive and statistically significant. The results obtained offer valuable insights for policymakers in GCC economies seeking to formulate effective policies addressing climate vulnerability.

Keywords: climate vulnerability; institutional quality; GCC economies; panel data (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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