The Impact of Income Inequality and Institutional Factors on Environmental Pollution in Selected Countries of the MENA Region: Using a Kuznetsian Theoretical Framework
Document Type : Research Paper
Authors
1 Department of Economics, Faculty of Economics and Social Sciences, Shahid Chamran University, Ahvaz, Khuzestan, Iran,
2 Department of Agricultural Economics, College of Agriculture, Shiraz University
Abstract
One of the most important issues confronting many developing nations today is environmental pollution, which not only leads to ecological challenges but also results in adverse economic and social consequences. While numerous studies have focused on the influence of economic factors on environmental pollution, there has been comparatively less research on the impact of infrastructural elements, including institutional factors and income inequality. An analysis of statistical data indicates that many countries within the MENA region, categorized as developing nations, exhibit weak institutional frameworks and pervasive income inequality. Consequently, investigating the effects of these variables on environmental quality could yield significant insights. Thus, the current study was conducted to explore the determinants of environmental pollution in MENA countries. Employing a panel data model and the generalized least squares method for the period of 2010 to 2022, the findings confirmed the Kuznets hypothesis for MENA nations, revealing that the coefficient for per capita income is negative while that for its square is positive. Furthermore, the Gini index demonstrates a positive and significant direct effect on pollution, indicating that, holding other factors constant, an increase in income inequality exacerbates pollution levels in the MENA region. Conversely, the interaction between the Gini index and per capita income was found to be negative, suggesting that income inequality can mitigate pollution when per capita income simultaneously rises. Additionally, the results indicate that institutional factors play a direct role in reducing pollution, while variables such as energy consumption, industrialization, and economic openness have contributed to increased environmental pollution in MENA countries.
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