How do institutional factors affect sustainable development? A comparative analysis

Efficient environmental resource management is a major problem for countries participating in the Belt and Road Initiative (BRI) in sustainable development (SD). This article determines the effects of BRI policy and institutional factors (corruption control, rule of law, and political stability) on sustainable development in 103 BRI countries between 2007 and 2019. We use across high-income, upper-middle-income, lower-middle-income, and low-income (LI) countries. The main findings indicate that BRI and institutional variables like the rule of law, political stability, and corruption control are critical in boosting SD. The interacting effect between BRI and institutional factors can improve SD. Overall, the findings show that the BRI and combined performance of institutional quality indicators are lower in LI countries as compared to other income countries. Trade openness and human capital positively affect SD across the panel and all income groups. Our analyses imply two major policy implications: legislative assistance in the form of institutional enforcement is essential to establish effective and productive natural resource management policies, and when creating environmental resource protection policy from the aspect of environmental governance, various institutional structures should be examined.