Trade and environmental quality in african countries: Do institutions matter?

We examine the impact of trade and political institutions on environmental quality in Africa and explore whether political institutions matter to the trade-environment relationship. We use data from a large group of African countries, covering the period 1990-2008 and two indicators of environmental quality: net forest depletion and CO2 emissions. Results from GMM-SYS estimates suggest that political institutions influence the relationship between trade and environmental quality only in the case of CO2 emissions. Interestingly, we find that polity has a U relationship with net forest depletion. In addition, the results are in favor of an environmental Kuznets curve in the case of pollution but not in the case of net forest depletion. Finally, the results suggest that urbanization has a positive and linear impact on CO2 emissions, while it has a U-shaped relationship with deforestation. We discuss the policy implications of these findings. © 2016 EEA.