IDEAS home Printed from https://ideas.repec.org/a/eee/ememar/v61y2024ics1566014124000475.html
   My bibliography  Save this article

Climate change, governance, and macroeconomic stability: Empirical analysis in a panel of African countries

Author

Listed:
  • Assoumou-Ella, Giscard
  • Nkah-Ella, Cédric

Abstract

Based on linear and non-linear threshold modeling, we show that improving governance in all its dimensions is a factor in mitigating the adverse effects of climate change on macroeconomic stability in ten African countries. This result is a contribution to the existing literature that focuses primarily on the effect of governance and climate change on economic activity, with the addition of indirect and threshold effects. It also sheds new empirical light on this issue in a sample of African countries that are particularly exposed to climate change, cyclical fluctuations, and poor governance; countries that have not been sufficiently considered in existing empirical literature.

Suggested Citation

  • Assoumou-Ella, Giscard & Nkah-Ella, Cédric, 2024. "Climate change, governance, and macroeconomic stability: Empirical analysis in a panel of African countries," Emerging Markets Review, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:ememar:v:61:y:2024:i:c:s1566014124000475
    DOI: 10.1016/j.ememar.2024.101152
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1566014124000475
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ememar.2024.101152?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Campiglio, Emanuele, 2016. "Beyond carbon pricing: The role of banking and monetary policy in financing the transition to a low-carbon economy," Ecological Economics, Elsevier, vol. 121(C), pages 220-230.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
    4. Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 43-63, November.
    5. Warwick J McKibbin & Adele C Morris & Peter J Wilcoxen & Augustus J Panton, 2020. "Climate change and monetary policy: issues for policy design and modelling," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(3), pages 579-603.
    6. Stavins, Robert & Jaffe, Adam & Newell, Richard, 2000. "Technological Change and the Environment," Working Paper Series rwp00-002, Harvard University, John F. Kennedy School of Government.
    7. Silvio Funtowicz & Martin O'Connor & Jerry Ravetz, 1997. "Emergent Complexity and Ecological Economics," Chapters, in: Jeroen C.J.M. van den Bergh & Jan van der Straaten (ed.), Economy and ecosystems in change, chapter 4, pages 75-95, Edward Elgar Publishing.
    8. Noel Johnson & William Ruger & Jason Sorens & Steven Yamarik, 2014. "Corruption, regulation, and growth: an empirical study of the United States," Economics of Governance, Springer, vol. 15(1), pages 51-69, February.
    9. Stavros A. Zenios, 2022. "The risks from climate change to sovereign debt," Climatic Change, Springer, vol. 172(3), pages 1-19, June.
    10. Joseph E. Stiglitz, 1974. "Growth with Exhaustible Natural Resources: The Competitive Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 139-152.
    11. Le, Thai-Ha & Chang, Youngho & Park, Donghyun, 2016. "Governance, Vulnerability to Climate Change, and Green Growth: International Evidence," ADB Economics Working Paper Series 500, Asian Development Bank.
    12. K. Mukherjee & B. Ouattara, 2021. "Climate and monetary policy: do temperature shocks lead to inflationary pressures?," Climatic Change, Springer, vol. 167(3), pages 1-21, August.
    13. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
    14. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    15. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    16. Robert M. Solow, 1974. "The Economics of Resources or the Resources of Economics," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 12, pages 257-276, Palgrave Macmillan.
    17. Eleftherios Giovanis & Oznur Ozdamar, 2022. "The impact of climate change on budget balances and debt in the Middle East and North Africa (MENA) region," Climatic Change, Springer, vol. 172(3), pages 1-27, June.
    18. Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 157-183, August.
    19. Joseph Stiglitz, 1974. "Growth with Exhaustible Natural Resources: Efficient and Optimal Growth Paths," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 123-137.
    20. van den Bergh, Jeroen C. J. M., 1996. "Dynamic modeling : Eds. Bruce Hannon and Matthias Ruth, 1994. Springer-Verlag; 248 pp. + index. ISBN: 0-387-94287-4," Ecological Economics, Elsevier, vol. 19(1), pages 92-93, October.
    21. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    22. Daron Acemoglu & James A. Robinson & Thierry Verdier, 2004. "Alfred Marshall Lecture: Kleptocracy and Divide-and-Rule: A Model of Personal Rule," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 162-192, 04/05.
    23. Jac C Heckelman & Benjamin Powell, 2010. "Corruption and the Institutional Environment for Growth," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 52(3), pages 351-378, September.
    24. David Klenert & Linus Mattauch & Emmanuel Combet & Ottmar Edenhofer & Cameron Hepburn & Ryan Rafaty & Nicholas Stern, 2018. "Making carbon pricing work for citizens," Nature Climate Change, Nature, vol. 8(8), pages 669-677, August.
    25. Nordhaus, William D, 1977. "Economic Growth and Climate: The Carbon Dioxide Problem," American Economic Review, American Economic Association, vol. 67(1), pages 341-346, February.
    26. Thierry Verdier & Daron Acemoglu, 2000. "The Choice between Market Failures and Corruption," American Economic Review, American Economic Association, vol. 90(1), pages 194-211, March.
    27. Maximilian Auffhammer, 2018. "Quantifying Economic Damages from Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 32(4), pages 33-52, Fall.
    28. Siddiqui, Danish Ahmed & Ahmed, Qazi Masood, 2013. "The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 18-33.
    29. Mr. Dominique M. Guillaume & Mr. Roman Zytek & Mr. Mohammad Reza Farzin, 2011. "Iran: The Chronicles of the Subsidy Reform," IMF Working Papers 2011/167, International Monetary Fund.
    30. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giuseppe Cornelli, 2017. "Cosa s’intende per sostenibilità economica? Riflessione sul significato di sistema economicamente sostenibile/What is meant by economic ustainability? Reflection on the definition of today’s concept o," IRCrES Working Paper 201710, CNR-IRCrES Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY - former Institute for Economic Research on Firms and Growth - Torino (TO) ITALY.
    2. Fondo Sikod & Gadom Djal-Gadom & et Armand Luc Fotuè Totouom, 2013. "Soutenabilité Economique d'une Ressource Epuisable: Cas du Pétrole Tchadien," African Development Review, African Development Bank, vol. 25(3), pages 344-357, September.
    3. Edward B. Barbier & Joanne C. Burgess, 2021. "Sustainable Use of the Environment, Planetary Boundaries and Market Power," Sustainability, MDPI, vol. 13(2), pages 1-19, January.
    4. Andre, Francisco J. & Cerda, Emilio, 2005. "On natural resource substitution," Resources Policy, Elsevier, vol. 30(4), pages 233-246, December.
    5. Ourvashi Bissoon, 2017. "Is Sub-Saharan Africa on a Genuinely Sustainable Development Path? Evidence Using Panel Data," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 11(4), pages 449-464, November.
    6. Brock, William A. & Taylor, M. Scott, 2005. "Economic Growth and the Environment: A Review of Theory and Empirics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821, Elsevier.
    7. Dzhumashev, Ratbek, 2024. "The role of physical constraints on production," Ecological Economics, Elsevier, vol. 216(C).
    8. Slesman, Ly & Abubakar, Yazid Abdullahi & Mitra, Jay, 2021. "Foreign direct investment and entrepreneurship: Does the role of institutions matter?," International Business Review, Elsevier, vol. 30(4).
    9. Svartzman, Romain & Dron, Dominique & Espagne, Etienne, 2019. "From ecological macroeconomics to a theory of endogenous money for a finite planet," Ecological Economics, Elsevier, vol. 162(C), pages 108-120.
    10. Slesman, Ly & Baharumshah, Ahmad Zubaidi & Ra'ees, Wahabuddin, 2015. "Institutional infrastructure and economic growth in member countries of the Organization of Islamic Cooperation (OIC)," Economic Modelling, Elsevier, vol. 51(C), pages 214-226.
    11. Wu, Haitao & Xu, Lina & Ren, Siyu & Hao, Yu & Yan, Guoyao, 2020. "How do energy consumption and environmental regulation affect carbon emissions in China? New evidence from a dynamic threshold panel model," Resources Policy, Elsevier, vol. 67(C).
    12. Hala Abu-Kalla & Ruslana Rachel Palatnik & Ofira Ayalon & Mordechai Shechter, 2020. "Hoard or Exploit? Intergenerational Allocation of Exhaustible Natural Resources," Energies, MDPI, vol. 13(24), pages 1-20, December.
    13. Baharumshah, Ahmad Zubaidi & Slesman, Ly & Wohar, Mark E., 2016. "Inflation, inflation uncertainty, and economic growth in emerging and developing countries: Panel data evidence," Economic Systems, Elsevier, vol. 40(4), pages 638-657.
    14. Samargandi, Nahla & Fidrmuc, Jan & Ghosh, Sugata, 2015. "Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries," World Development, Elsevier, vol. 68(C), pages 66-81.
    15. Franco, Marco P.V. & Gaspard, Marion & Mueller, Thomas, 2019. "Time discounting in Harold Hotelling's approach to natural resource economics: The unsolved ethical question," Ecological Economics, Elsevier, vol. 163(C), pages 52-60.
    16. Carmela D'Avino, 2015. "Net Interoffice Accounts of Global Banks: The Role of Domestic Funding," IJFS, MDPI, vol. 3(3), pages 1-17, June.
    17. Schilling, Markus & Chiang, Lichun, 2011. "The effect of natural resources on a sustainable development policy: The approach of non-sustainable externalities," Energy Policy, Elsevier, vol. 39(2), pages 990-998, February.
    18. Junbai Pan & Kun Lv & Shurong Yu & Dian Fu, 2022. "What Mechanisms Do Financial Marketization and China’s Fiscal Decentralization Have on Regional Energy Intensity? Evidence Based on Spatial Spillover and Panel Threshold Effects Perspectives," IJERPH, MDPI, vol. 19(9), pages 1-27, May.
    19. Khan, Muhammad Atif & Gu, Lulu & Khan, Muhammad Asif & Oláh, Judit, 2020. "Natural resources and financial development: The role of institutional quality," Journal of Multinational Financial Management, Elsevier, vol. 56(C).
    20. Lakshmi, Geeta & Saha, Shrabani & Bhattarai, Keshab, 2021. "Does corruption matter for stock markets? The role of heterogeneous institutions," Economic Modelling, Elsevier, vol. 94(C), pages 386-400.

    More about this item

    Keywords

    Climate change; Governance; Macroeconomic stability;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ememar:v:61:y:2024:i:c:s1566014124000475. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620356 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.