Growth and environmental degradation in MENA countries: methodological issues and empirical evidence

ABSTRACT A large number of studies on the validity of the environmental Kuznets curve for MENA countries have been conducted, producing (as expected) a mixed bag of results. Several econometric issues are considered with reference to estimates of the EKC for Algeria, Egypt, Jordan and Tunisia. These issues include the order of the polynomial, the validity of the log–log specification, cointegration and spurious correlation, missing variables, and the sensitivity and fragility of the results. It is concluded that the most serious issue is the sensitivity of the results to model specification and other factors, which is not considered in the MENA studies of the EKC. Robust results are produced with respect to the order of polynomial, estimation method and measurement of the income variable.