Globalization, Fiscal Decentralization, and Environmental Degradation in OECD Countries.

Abstract

This study highlights the impact of globalization and fiscal decentralization on environmental degradation in OECD countries using panel data from 1995 to 2020. For data analysis, panel ADF test and panel ARDL model are applied. The study found that globalization is negatively and significantly related to the environmental deterioration in OECD countries. Similarly, expenditure decentralization is found to be a contributing factor to environmental degradation. In contrast, revenue decentralization is negatively and significantly related to environmental degradation. The variables population and energy use are also positive, while inflation rate is negatively related to the environmental degradation. The findings suggested that OECD countries must implement policies that curtail the adverse effects of globalization and fiscal decentralization on the environment.