The Dynamic Relationship Between Economic Globalisation, Institutional Quality, And Ecological Footprint: Evidence From Ghana

Abstract

Research on the relationship between globalisation and the environment tends to focus on on the direct effect of globalisation, rarely considering the role of institutions. This paper introduces insights from political economy, which suggests that environmental sustainability models would be greatly improved if institutions are considered. We tested this hypothesis by estimating the relationship between economic globalisation, bureaucratic quality, and ecological footprint in Ghana for the period 1984–2016. The long-run analysis is based on the autoregressive distributive lag (ARDL) bound testing approach to cointegration. The result supports the hypothesis that expansion in economic globalization has a reducing effect on environmental quality. Bureaucratic quality appears to exert a significant positive effect on ecological footprint. Furthermore, the estimation shows that the quality of institutions is critical for environmental quality. Based on the results, the paper presents some policy recommendations.