International Journal of Business and Economics Volume 16, No. 1 June, 2017

Institutional Quality and Air Pollution: International Evidence

Wen-Lin Wu

Department of International Business, Feng Chia University, Taiwan

Abstract

This study aims to examine the effect of institutional quality on air quality using data on fine particulate matter, PM2.5, and six dimensions of good governance from the World Bank for 167 nations over the period from 2000 to 2013. After controlling for economic and international openness variables, the empirical results show that countries with better quality regarding voice and accountability, political stability, government effectiveness and control of corruption have higher reported emissions of PM2.5 air pollution. This study confirms that energy use, population size and gross fixed capital formation help increase PM2.5 air pollution, whereas we support an inverted U-shape Environmental Kuznets Curve effect. These results suggest that government institutions should effectively take appropriate pollution control strategies and enforce environmental laws for the public good in the form of better air quality for their citizens.

Keywords：institutional quality, air pollution, fine particulate matter, trade openness, corruption.

JEL Classifications：F33, F43, P48.

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