Government expenditure and sustainable development in emerging markets: The role of institutional quality
In a contemporary era, fostering economic growth, social inclusion and environmental performance are crucial global objectives. While the dynamics among government spending, institutional quality and each of the aforementioned pillars of sustainable development have been widely examined, gaps remain...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2025-06-01
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| Series: | Journal of Open Innovation: Technology, Market and Complexity |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2199853125000939 |
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| Summary: | In a contemporary era, fostering economic growth, social inclusion and environmental performance are crucial global objectives. While the dynamics among government spending, institutional quality and each of the aforementioned pillars of sustainable development have been widely examined, gaps remain in how public spending and quality of governance shape sustainable development in a holistic approach. The gaps, however, become more significant in emerging markets where inherent structural challenges and sustainability objectives coexist. Therefore, the study investigates the dynamics among government expenditure, institutional quality and sustainable development in 46 emerging market economies from 1990 to 2022. The tests for cross-sectional dependence, slope homogeneity and panel cointegration confirm the coexistence of cross-sectional dependence, slope heterogeneity and cointegration in the panel data. Consequently, the CS-ARDL, CS-DL and AMG models are used to analyze the variables due to the inherent panel characteristics. The findings, which remain stable under different econometric specifications, suggest that the individual effects of government spending and institutional quality on sustainable development may be negative in the long run. However, these effects are conditional and context specific. Public spending contributes positively to sustainable development when implemented within a strong institutional framework, highlighting the importance of policy coherence. The study, therefore, suggests the need for integrated fiscal and institutional strategies to effectively advance sustainable development in emerging economies. |
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| ISSN: | 2199-8531 |