Abstract
This article extends previous sustainability literature by demonstrating the effectiveness of good governance in rebalancing the economic, environmental, and social components of sustainable development. Good economic, political, and institutional governance are considered as conditional variables, which allow rebalancing these three components in the case of 20 selected MENA economies for the period 1996–2014. Using simultaneous-equation modeling approach, we find that (i) political and institutional governance positively contribute to the three components of sustainable development; (ii) there exists a two-way linkages between human development and economic growth, meaning that they are interrelated and may very well serve as complements to each other; (iii) increased economic growth conducts to further emissions, which, in turn, decreases economic growth; (iv) enhancing human development conducts to a reduction in carbon dioxide emissions, which, in turn, negatively affects human development; (v) improving both political and institutional governance permits MENA governments to moderate both the negative impacts of carbon emissions on economic growth and human development and the positive impact of economic growth on increasing emissions, and as a result sustainable development.
•The effectiveness of good governance for sustainable development (SD) is examined.•Political and institutional governance positively contribute to the three pillars of SD.•Enhancing human development (HD) conducts to a reduction in carbon emissions (CO).•Good governance moderates the negative impact of CO on economic growth and HD.•Good governance moderates the positive impact of economic growth on CO.