How does a democratic government with limited intervention affect environmental quality? Fresh evidence with international panel data

This paper examines the effect of democratic countries which encourage economic freedom on the environment, measured by Carbon Dioxide (2) emission. For the empirical analysis, an annual panel data sample consisting of 179 countries from 1990 to 2018 is collected. Applying the Ordinary Least Squares and Two-Step Generalized Method of Moments estimation techniques, we find that the environmental quality is enhanced with a higher degree of democracy and economic freedom. The results firmly hold for high and middle-income countries when the sample is decomposed across income levels.