Governance, CO2 emissions and inclusive human development in sub-Saharan Africa

Abstract

This study investigates the relevance of government quality in moderating the incidence of environmental degradation on inclusive human development in 44 sub-Saharan African countries for the period 2000–2012. Environmental degradation is measured with CO2 emissions and the governance dynamics include: political stability, voice and accountability, government effectiveness, regulation quality, the rule of law and corruption-control. The empirical evidence is based on the generalised method of moments. Regulation quality modulates CO2 emissions to exert a net negative effect on inclusive development. Institutional governance (consisting of corruption-control and the rule of law) modulates CO2 emissions to also exert a net negative effect on inclusive human development. Fortunately, the corresponding interactive effects are positive, which indicates that good governance needs to be enhanced to achieve positive net effects. A policy threshold of institutional governance at which institutional governance completely dampens the unfavourable effect of CO2 emissions on inclusive human development is established. Other policy implications are discussed.