GOVERNANCE AND MACROECONOMIC DETERMINANTS OF ENVIRONMENTAL QUALITY IN MALAYSIA AND SINGAPORE: A CONCEPTUAL FRAMEWORK
DOI:
https://doi.org/10.35631/AIJBES.828044Keywords:
Carbon Dioxide Emissions, Environmental Quality, Governance, Macroeconomic DeterminantsAbstract
Environmental quality has become a major policy concern as developing and developed economies struggle to balance economic expansion with ecological sustainability. In Southeast Asia, Malaysia and Singapore provide a useful analytical setting because both countries are economically integrated and growth-oriented, yet differ institutional strength, regulatory enforcement, and environmental governance capacity. This conceptual paper develops a framework linking governance, economic growth, energy consumption, foreign direct investment, trade openness, and domestic investment to environmental quality, proxied by carbon dioxide emissions. This paper argues that governance is not only a direct determinant of environmental quality, but also other macroeconomic variables affect environmental outcomes. The Environmental Kuznets Curve and institutional governance perspectives are used to explain the expected relationships. This paper identifies a conceptual gap in the literature, namely the limited integration of governance with macroeconomic drivers of environmental quality in a comparative Southeast Asian setting. It proposes a framework in which strong governance can mitigate the environmentally harmful effects of growth, energy use, trade, and investment by improving regulation, enforcement, and policy coordination. This paper also contributes by offering a clearer theoretical basis for understanding environmental sustainability through institutional quality and by providing propositions that may guide future empirical work and policy design.
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