The moderating role of natural resources between governance and CO2 emissions: Evidence from MENA countries

Abstract

Despite the diversity of theoretical studies, natural resources’ moderating role between governance indicators and environmental quality remains a controversial issue. The purpose of this paper is therefore to clarify the nature of this role in the Middle East and North Africa (MENA) countries from 1996 to 2017 relying on the generalized method of moments system estimators. The empirical results reveal that corruption control, political stability, rule of law, voice and accountability, and government effectiveness increase CO2 emissions, while regulation quality does not affect CO2 emissions. Our findings also show that FDI and GDP increase CO2 emissions. However, natural resources moderate the governance indicators to reduce CO2 emissions. Therefore, policy-makers should increase public awareness of the best use of natural resources. Thus, improving governments’ institutional framework will generally contribute to reducing the greenhouse gas emission levels in the MENA countries.