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EKC and Macroeconomics Aspects of Well-being: a Critical Vision for a Sustainable Future

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Abstract

This paper aims to investigate a modified version of the environmental Kuznets curve by including human development and governance as a macroeconomics determinant of sustainability. For this purpose, our study uses the Johansen panel cointegration testing to verify the existence of long-run relationships and we employed the fixed effects models which founded on the panel-based error correction ones using data for 26 African countries over the period 1990–2013. Our findings highlight that there exists a quadratic relationship among the negative genuine saving (GS−) and the human development variable. This implies that the assumed EKC hypothesis is verified for the modified version of EKC. The empirical evidence records the fact that the ecological issue in the Millennium Development Goals background is deeply influenced by the sustainability aspects. Further, our findings recommended that African countries should take seriously the human aspect. Further, the academic researchers, policymakers, and international organizations should unify around a specific and clear definition of the sustainability notion to reach a verdict consensus about his measure and the way of computing by taking into consideration the diversity and the specificities of each region.

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Notes

  1. According to Anand and Sen (2000) and Sen (2000), human development can be defined as the process of enlarging human capabilities which belong to the current generation without constraining the capabilities of the future ones.

  2. For an extensive literature on the EKC hypothesis, see for example Tiba and Omri (2016).

  3. Genuine saving index (also called the adjusted net saving) is a sustainability measure constructed around the notions of green national accounts. Genuine saving ratio computes the real rate of savings in an economy after taking into consideration the natural resources depletion, pollution damage, and human capital investment (World Bank, 2014).

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  1. Faculty of Economics and Management, University of Sfax, Sfax, Tunisia

    Sofien Tiba & Mohamed Frikha

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  1. Sofien Tiba
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Tiba, S., Frikha, M. EKC and Macroeconomics Aspects of Well-being: a Critical Vision for a Sustainable Future. J Knowl Econ 11, 1171–1197 (2020). https://doi.org/10.1007/s13132-019-00600-9

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