FISCAL DISCIPLINE, INSTITUTIONAL QUALITY AND ENVIRONMENTAL QUALITY
Abstract
The quality of a country’s environment has become an important issue in recent time this is because massive
economic activities which is the goal of various government in West Africa countries produces anthropogenic
greenhouse gases which affect the environment. Hence, the study examined the impact of fiscal discipline,
institutional quality and environmental quality in West Africa. While, the specific objectives are to examine the: (i)
impact of fiscal discipline on environmental quality in West Africa; (ii) effect of institutional quality on
environmental quality in West Africa; and (iii) interactive effect of fiscal discipline and institutional quality on
environmental quality in West Africa. The study employed Static panel technique and Generalized Method
of Moments (GMM) to analyzed the data gathered from World Development Indicator and World Governance
Indicator. From the findings of the study, it was shown that the p-value of first lag of the environmental quality is
0.063, while the coefficient is .990. Therefore, it was revealed that institutional quality is a significant determinant
of environmental quality. The result of the study also revealed that fiscal discipline is a significant determinant of
environmental quality. Also, the coefficient value of the institutional quality is 0.131, depicting that a unit increase
in first lag of environmental quality will lead to .131. The result of the study further revealed that interaction
between institutional quality and fiscal discipline is a significant determinant of environmental quality. The study
concluded that institutional quality and fiscal discipline have significant impact on environmental quality in West
African countries. It was recommended that African governments should promote fiscal discipline by implementing
reforms aimed at developing their fiscal discipline because this has the potential to help reduce CO2 emissions or
increase environmental quality.
