Governance, Financial Development, and Green Growth in Iraq: An Empirical Study

Abstract

The primary objective of "green growth" is to achieve an environment that is both pleasant and sustainable. The attainment of green growth has emerged as an imperative necessity in light of the prevailing circumstances surrounding global warming and climate change. Hence, the present study aims to assess the impact of governance and financial development (FD) on the promotion of green growth in Iraq during the period spanning from 2000 to 2022. A number of previous investigations have examined the impact of financial development and governance on economic growth and environmental quality in Iraq. However, these studies have not specifically focused on the concept of green growth. The present study utilizes the Autoregressive Distributed Lag Model (ARDL) Bound Testing approach, based on an initial assessment of stationarity. The results of our study reveal a noteworthy positive influence of governance and financial development on the promotion of green growth in Iraq, both in the short and long term. Furthermore, it has been observed that the adoption of renewable energy sources and the process of urbanization play a significant role in fostering the advancement of sustainable economic growth. The adverse impact of non-renewable energy on sustainable development in Iraq has been observed. It is advisable for policymakers to prioritize the advancement of financial sector services in order to effectively harness the advantages associated with green growth. In addition, it is advisable for the government of Iraq to enhance its regulatory framework, specifically in relation to environmental considerations, in order to ensure the sustained progression of green growth in the long term.