Essays on environmental quality, political regime transition, and sectoral productivity : empirical eidence from sub-Saharan Africa and major wheat-producing countries : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy at Massey University, School of Accountancy, Economics, and Finance, Palmerston North, New Zealand

Abstract

This thesis explores the interrelated areas of environmental quality and political regime transition, and their effects on sectoral productivity in sub-Saharan Africa (SSA) and major wheat-producing countries. It examines three independent issues, each related to the others. Study one examines how air quality influences wheat productivity; study two examines how political regime transition affects cereal productivity; and study three examines how political regime transition affects renewable electricity consumption. This dissertation comprises three empirical studies that, presented individually, explore the interplay among air quality, political regime transition, and sectoral productivity across SSA countries.

The first study examines the statistically and economically significant negative impact of air pollution (Particulate Matter, PM2.5) on wheat productivity across major wheat-producing countries, controlling for agricultural inputs, climate, and economic variables. Temperature, measured in Growing Degree Days (GDD), plays a significant moderating role. The paper also shows significant non-linear effects of PM2.5 and GDD. The result is robust to alternative dependent variables, additional control variables (governance indices), alternative estimation methods (Two-Stage Least Squares, 2SLS, and Instrumental Variable Generalised Method of Moments, IV-GMM), and the exclusion of high-polluting countries, such as China and India. The results reveal heterogeneity across regions and among countries with high levels of CO₂ emissions from fossil fuels. The adverse effect of air pollution on real Gross Domestic Product (GDP) per capita growth is mediated by wheat productivity, which implies that by reducing PM2.5 to 10μg/m³ following WHO’s interim target, per capita real GDP growth would increase by 1.7%, which would be mediated by an increase in wheat productivity.

The second study demonstrates a statistically significant and positive impact of political regime transition on cereal productivity across the SSA countries after controlling for agricultural inputs, climate variables, demographic variables, and economic variables. The up (or down)-switching sample of political regimes suggests that the transition from the current regime to democracy (or autocracy) has a significant impact on cereal productivity. To address endogeneity, I use 2SLS and IV-GMM. The moderating effects of NPK fertiliser consumption, intrastate conflict, mineral rents, and the mediating effects of political stability, control of corruption, ODA, and subsidies have a significant impact on cereal productivity. I examined alternative independent variables, specifically political regime from Freedom House data, various democracy indices, and an alternative dependent variable. Moreover, I find significant heterogeneity across regions and between British and non-British colonisation in SSA. For further study, the results demonstrate that a transition from the current regime to democracy improves food security and total factor productivity in agriculture by enhancing cereal productivity in SSA.

The third study reveals a significant and positive impact of the political regime transition on renewable electricity consumption and mitigating environmental degradation in SSA countries, after controlling for demographic variables, economic variables, institutional factors, intrastate conflict, and access to energy. Additionally, the results are tested for up (or down) switching and classification of political regimes, which have a significant positive (or negative) impact on renewable electricity consumption across SSA countries. For the endogeneity test, I use 2SLS instrumental variables. In addition, I tested the mediating effect of CO₂ and GHG emissions and the moderating effect of mineral rents on the effect of increased renewable electricity consumption in SSA. The results are tested for alternative independent variables, specifically various democracy indices, while controlling for additional variables and including South Africa for robustness tests. The results also demonstrate the association between renewable electricity consumption and political regime across regions, as well as the impact of British and non-British colonisation of SSA. The environmental degradation model implies that a political regime transition from the current regime to a democratic (or autocratic) regime can help mitigate environmental degradation by promoting renewable electricity consumption in SSA countries.

In summary, the findings emphasise the influence of air quality and democratic governance on improving food security and environmental sustainability by increasing sectoral productivity, particularly within the agricultural and energy sectors in SSA countries and globally.