The Impact of Financial Sustainability on the Environmental Dimension of Sustainable Development: An Econometric Study Using Panel Data Models for Algeria and Selected Arab Countries (2004–2022)

Abstract

. This study aims to assess the impact of fiscal sustainability on the environmental dimension of sustainable development in Algeria and a selected group of Arab countries over the period 2004– 2022. To analyze the dynamic relationships among the variables, the study employs panel-data econometric models, particularly the Panel ARDL model. To identify the characteristics of the data and select the appropriate model, a series of preliminary econometric tests were conducted. The results revealed the existence of a long-run relationship and cointegration among the study variables. Furthermore, fiscal sustainability was found to have a significant impact on the environmental dimension of sustainable development. The nature of this impact varied between the short and long run, as well as across the countries under investigation. The findings highlight the importance of directing financial resources toward green investments, renewable energy, and environmental protection. The study recommends the implementation of integrated fiscal and environmental policies to ensure a balance between fiscal sustainability and sustainable development.