Socio-economic Determinants of Environmental Performance in Developing Countries

Abstract

Preventing the environment is a gigantic challenge for policy-makers as well as for researchers nowadays. The environment is not distressed by only economic activities, but social factors like institutional quality, ethnic diversity, and political freedom also play an important role for environmental performance in developing economies. This paper is an effort explaining the impact of social, political, and economic activities on environment in 116 developing economies for the time span of 1996–2019. For the purpose, panel autoregressive distributed lags technique is employed to determine long-run relation among variables. The findings of the study reveal that GDP growth, financial sector, and energy consumption in these economies are causing to increase the carbon dioxide emissions while institutional quality, ethnic fractionalization, and political freedom have their crucial role to reduce the level of environmental deterioration. The policy-makers may adopt a policy of social interconnection among various ethnic groups, high-quality institutions, political freedom to all, and inclusive financial development for less pollutant environment in these economies.