Institutional quality and green economic growth in West African economic and monetary union

Abstract

This study examined the how institutions influence green economic growth in the West African Economic and Monetary Union (WAEMU) countries with view to contributing to Sustainable development goal of good health and well-being (SDG 3), clean water and sanitation (SDG 6), decent work and economic growth (SDG 8), sustainable cities and communities (SDG11), responsible consumption and production (SDG12). The study made use of data sourced from the Development Indicators (WDI) and Governance Indicators (WGI) from 2002 to 2017 covering the eight (08) WAEMU countries. The study applied the Fully Modified Ordinary Least Squares (FMOLS), which is robust to the heterogeneity and endogeneity presence, to estimate the long-run parameters of the institutional quality effect on green economic growth. Findings obtained from the study show that the institution's quality influence differs across the countries of study. The findings implication is that institutional quality enhances green economic growth. In specific terms, institutions level enhances green economic growth in counties such as Cote d’Ivoire, Mali, Niger, Senegal, and Togo. On the contrary, it however, deteriorates green economic growth in other countries such as Benin and Burkina Faso. Against this finding, the study recommends that there is the need for WAEMU countries to consider the improvement of institutional framework, making sure that a robust institutional mechanism such as elimination of corruption, improve government effectiveness, strong credibility of government commitments and policies, an efficient judiciary, sound policies and regulations to reach the green economic growth desired level. The findings implication is that good institutional framework such as good governance, control of corruption, political stability and absence of violence among others, are essential factors in promoting green economic growth. The findings highlight the importance of investment in renewable energy and sustainable agriculture as key drivers of green economic growth in the region. These findings have important implications for policymakers in the WAEMU region, as they provide evidence-based insights into the role of institutional quality in promoting sustainable and inclusive economic growth. The study extends the frontiers of knowledge on green economic growth by using green economic growth a new established indicator that makes use of economic and environmental indices to ensure accurate and assessable economic prosperity.

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