Fostering green growth in Asian developing economies: The role of good governance in mitigating the resource curse

This study conducts a comprehensive analysis of the substantial impact of good governance and green growth on the phenomenon of resource curse in 17 developing Asian economies over the period from 1999 to 2020. Utilizing the Autoregressive Distributed Lag (ARDL) approach, the research reveals that heightened government effectiveness and political stability are linked to a sustained reduction in vulnerability to the resource curse. The negative coefficient associated with the green growth index underscores the crucial role of environmentally sustainable practices in alleviating the adverse consequences of resource dependence. However, challenges surface, as positive coefficients for financial market size, Foreign Direct Investment (FDI), and GDP per capita suggest potential risks in economies reliant on resources. Particularly notable is the finding that a 1 % increase in GDP per capita is associated with a 0.17 % increase in vulnerability to the resource curse, underscoring the necessity for prudent resource management. Across both short- and long-term analyses, indicators of good governance and green growth emerge as effective mechanisms to counteract the resource curse. The study concludes by offering policy recommendations for developing Asian economies, emphasizing the critical importance of prioritizing good governance, integrating green growth initiatives, and fostering environmentally conscious investments to achieve sustainable and resilient economic development.