Investigating the environmental Kuznets curve (EKC) hypothesis : does government effectiveness matter? : evidence from 170 countries

The lack of studies that examined the influence of government effectiveness on environmental pollution and whether it formulates the environmental Kuznets curve (EKC) hypothesis motivated this research. Therefore, this research examines the role of government effectiveness on CO2 emission in 170 countries. To achieve the research aims, the system generalized method of moment model is applied while categorizing the countries into three groups: namely high, moderate, and low government effectiveness countries. The major results of this research revealed that government effectiveness reduces CO2 emission significantly in the overall sample, high and the moderate government effectiveness countries while it is not significant in the low government effectiveness countries. Moreover, the EKC hypothesis is present in the overall sample high and moderate government effectiveness countries while the hypothesis does not exist in the low government effectiveness countries. Therefore, the outcome of this research shows clearly that effectiveness of the government in terms of independence from political pressures, the quality of policy preparation and application, and the reliability of the government’s commitment to such policies is an important element that determines the EKC hypothesis. From the outcome of this research, a number of policy implications were provided for the investigated countries.