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Modelling the relationship between poverty, environment, and institutions: a panel data study

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Abstract

The paper examines the relationship between poverty and CO2 emission. We contribute by using a global panel data of 146 countries over the period 1996–2014 and by focusing on the role of institution in poverty and environmental degradation nexus. The main findings are that the non-linearity relationship between poverty and CO2 emission could prompt a further increase in the poverty and environmental degradation. However, an increase in the institutional quality leads to a reduction in poverty and more protection to the environment. The main policy recommendation is that all countries need to improve their institutional framework so that reduction of poverty and environmental degradation can occur.

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Notes

  1. The years 1997, 1999, and 2001 have been excluded because there is no available data for Kaufman indicators in these years.

  2. Kaiser criterion suggests keeping the principal components that have an eigenvalue more than 1.

  3. The literature shows other measures of poverty such as the Human Poverty Index (HPI) and the Multidimensional Poverty Index (MPI). HPI is a composed indicator used by the United Nations to capture the poverty from different sides. Since 2010, this indicator is replaced by MPI. The access to the HPI data is no longer available and the MPI data do not cover the period used in this paper. In addition, these kinds of composite indicator may lead to collinearity in the regression analysis.

  4. According to the literature, the Human Development Index (HDI) is a more complete indicator of human development. However, the index is highly correlated to our variables; thus, we control only its health dimension by the use of life expectancy at birth.

  5. The GDP per capita could be the good variable to be used but it appears highly correlated to almost of our variables, so we use lnGDP to ovoid multicollinearity.

  6. Degenerative corruption is a term used by Wedeman (2012) to describe a corruption that can have a potentially catastrophic effect. However, he used the term “developmental corruption” to describe corruption that can have a less catastrophic effect.

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Authors and Affiliations

  1. British University in Egypt (BUE), Ismailia Road, El Sherouk City, Cairo, Egypt

    Reham Rizk

  2. UR MASE-ESSAIT, University of Carthage and Tunis Business School, University of Tunis, 38, street El-Boukri, 2074, El-Mourouj, Tunisia

    Mehdi Ben Slimane

Authors
  1. Reham Rizk
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  2. Mehdi Ben Slimane
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Correspondence to Reham Rizk.

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Responsible editor: Nicholas Apergis

Appendix

Appendix

Table 8 Countries list
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Table 9 Summary statistic and variables definition
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Table 10 Correlation matrix
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Rizk, R., Slimane, M.B. Modelling the relationship between poverty, environment, and institutions: a panel data study. Environ Sci Pollut Res 25, 31459–31473 (2018). https://doi.org/10.1007/s11356-018-3051-6

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