The research addresses a long-standing puzzle in environmental economics. Decades of empirical work have examined whether environmental regulation reduces pollution, with results that often seem contradictory: some studies find strong effects, others find weak or negligible ones. Carrasco’s explanation is that much of this inconsistency may stem from treating policy stringency and institutional quality as separate factors, when in reality they operate jointly. A carbon tax or an emissions trading scheme is only as effective as the bureaucracy that designs it, monitors compliance, and penalizes violators. Where that machinery is weak, even well-designed instruments may exist mostly on paper.

To capture this interaction formally, the study constructs a composite index that combines two distinct data sources. The first is the OECD’s Environmental Policy Stringency index, which scores countries on the toughness of their market-based and non-market environmental instruments, including taxes, trading schemes, feed-in tariffs, emission limits, and technology-support policies. The second is the World Bank’s Worldwide Governance Indicators, specifically the regulatory quality dimension, which measures perceptions of the ability of a government to formulate and implement sound policies and regulations. By integrating the two, the author created a measure that reflects not just how demanding a country’s environmental rules are, but how capable its regulatory apparatus is of carrying them out.

The dataset covers 40 countries observed annually from 1996 to 2020, a period chosen because the governance indicators begin in 1996. Thirty-two of the countries are classified as high-income and eight as middle-income, allowing the study to test whether the policy-institution relationship differs across levels of economic development. The outcome variables are per capita greenhouse gas emissions and per capita carbon dioxide emissions, the latter offering a narrower focus on the fossil-fuel-driven component of a country’s climate footprint. This panel structure, with repeated observations of the same countries over time, gives the analysis far more statistical power than a snapshot comparison ever could.

Methodologically, the study is notable for the care it takes with the quirks of international panel data. Emissions data across countries exhibit cross-sectional dependence, meaning that shocks in one country, such as a global financial crisis or an oil price spike, ripple through others, violating the independence assumptions of simpler estimators. Carrasco therefore begins with Pesaran tests for cross-sectional dependence to characterize the problem. He then applies Dumitrescu-Hurlin panel causality tests to establish the direction of the relationship between regulation and emissions, an important safeguard against the possibility that causality runs the other way, with wealthy, low-emission countries simply being able to afford stricter rules.

The centerpiece of the analysis is a set of panel quantile regressions, implemented using the approaches developed by Canay and by Machado and Santos Silva. Unlike ordinary regression, which estimates the effect of a variable at the average of the outcome distribution, quantile regression estimates effects at different points along that distribution. This matters enormously for emissions research, because the countries and years sitting at the bottom of the emissions distribution, the cleanest performers, may respond to policy very differently from those at the median or the top, where the heaviest emitters are found. A policy that barely registers among already-efficient economies might have large effects among the biggest polluters, and only a distributional method can reveal that.

The results are striking in their pattern. For the full sample of 40 countries, and separately for the high-income group, the interaction between regulatory quality and environmental policy stringency shows a negative and statistically significant relationship with both greenhouse gas and carbon dioxide emissions per capita. In other words, stringent policies deliver emission reductions specifically where regulatory institutions are strong. Moreover, the effect is not uniform across the distribution: it is generally stronger at the median and upper quantiles of emissions, precisely where the largest emitters sit. This suggests that the combination of tough rules and capable institutions has its greatest leverage where the decarbonization challenge is hardest.

The story changes, however, when the analysis turns to the eight middle-income countries. For this group, no significant relationship emerges between the policy-institution interaction and emissions, at any point in the conditional distribution. The author interprets this as evidence that stricter environmental policies require stronger institutional capacity and enforcement mechanisms to produce measurable environmental outcomes. In middle-income settings, where regulatory agencies may be underfunded, monitoring may be incomplete, and enforcement may be inconsistent, increasing policy stringency alone does not appear to bend the emissions curve. The finding carries an uncomfortable implication for rapidly industrializing economies: passing tougher climate legislation without simultaneously investing in governance may yield little in the way of actual emission reductions.

The robustness of these conclusions was tested in several ways. The quantile estimates were replicated using alternative estimators, and the specifications were re-run with lagged explanatory variables to allow time for policies to take effect and to further address potential endogeneity concerns. Across these variations, the core pattern held: a significant negative association for the full sample and for high-income countries, concentrated at the median and upper quantiles, and no significant association for the middle-income group. This consistency across methods strengthens the case that the findings reflect a genuine structural relationship rather than an artifact of one particular statistical technique.

For policymakers, the study arrives at a moment when the gap between climate pledges and climate outcomes has become a central concern of global governance. Its message is twofold. First, in high-income countries, the evidence supports combining ambitious policy stringency with continued investment in regulatory quality, since the two reinforce each other and the payoff is largest among the heaviest emitters. Second, for middle-income countries, the results caution against a purely legislative approach to climate policy; building the administrative and enforcement capacity of environmental institutions may be a prerequisite for stringent rules to have any effect at all. As nations race to meet net-zero targets, the research suggests that the pen that signs the law matters less than the institutions that make it real.

Subject of Research: The joint effect of environmental policy stringency and regulatory quality on per capita greenhouse gas and CO2 emissions

Article Title: The joint impact of regulatory quality and policy stringency on greenhouse gas emissions in middle income and high income countries

Article References: Carrasco, C. A. (2026). The joint impact of regulatory quality and policy stringency on greenhouse gas emissions in middle income and high income countries. Discover Sustainability. https://doi.org/10.1007/s43621-026-04823-0

Image Credits: AI Generated

DOI: 10.1007/s43621-026-04823-0

Keywords: greenhouse gas emissions, environmental policy stringency, regulatory quality, panel quantile regression, climate policy, environmental economics, governance indicators, middle-income countries, high-income countries, CO2 emissions, Dumitrescu-Hurlin causality, cross-sectional dependence

The study, which analyzes panel data from 39 countries over the period 2016 to 2023, takes an interdisciplinary approach to a question that has become increasingly urgent amid rising global fragmentation. Wars, sanctions, trade disputes, and diplomatic ruptures do not merely dominate headlines; they reshape the plumbing of the global financial system. The researchers set out to quantify how this turbulence interacts with foreign investment ecosystems to shape financial inclusion outcomes in both developing and developed economies. Their dataset draws on some of the most authoritative sources available in the field, including the World Bank Global Findex Database, the IMF Financial Access Survey, the World Governance Indicators, the Geopolitical Risk Index, and UNCTAD investment data. By combining these sources, the authors constructed a picture of how digital financial inclusion evolves from year to year under shifting political and economic conditions.

Methodologically, the paper is notable for its careful handling of the short-run dynamics that most cross-country studies tend to smooth over. The researchers applied a first-difference fixed-effects panel approach, which examines how changes in digital financial inclusion from one period to the next respond to changes in the explanatory variables, effectively controlling for all time-invariant country characteristics. To guard against the biases that plague dynamic panel models, particularly those arising from the correlation between lagged dependent variables and country-specific error terms, they employed dynamic generalized method of moments estimation together with LSDVC bias-corrected robustness checks. These techniques are essential when the dependent variable is persistent, meaning that past levels of digital financial inclusion strongly predict current levels, and when the number of countries is modest relative to the number of time periods.

Perhaps the most striking finding of the study concerns persistence itself. The authors report that, beyond institutional quality and conditional macroeconomic factors, the persistence of digital financial inclusion over time is the main, if not the only, driver of the phenomenon in their short-run panel. In plain terms, countries that were already advancing digital financial access tended to keep advancing, while those lagging behind found it difficult to break out of their trajectory within the eight-year window. This inertia has profound implications. It suggests that digital financial inclusion behaves less like a policy dial that governments can simply turn up and more like a cumulative process in which early momentum, network effects, and established digital infrastructure compound over time. For countries seeking to accelerate inclusion, the message is sobering: waiting has a cost, because the gap between leaders and laggards tends to reproduce itself.

Foreign direct investment emerges as a second central character in the story, but with an important twist. The study finds that FDI exerts a significant positive effect on digital financial inclusion once its interaction with geopolitical risk is properly accounted for. This statistical nuance matters. In models that ignore the interaction, the apparent effect of foreign investment may be distorted, because the benefit of FDI is not constant across political environments. Instead, the researchers show that the positive effect of foreign investment weakens as geopolitical risk rises. Capital, technology, and expertise flowing across borders appear to nurture digital financial ecosystems most effectively in stable environments, while in turbulent ones that same investment delivers a diminished boost. The finding echoes a broader theme in development economics: foreign capital is not a substitute for stability but a complement to it.

The geographic pattern of these effects adds another layer of significance. The study finds that the FDI effect is concentrated in non-OECD economies, meaning that developing countries stand to gain the most from foreign investment in digital finance when conditions are favorable, and to lose the most when geopolitical risk surges. This asymmetry maps directly onto the global development agenda. The authors connect their findings to Sustainable Development Goal 8 on decent work and economic growth, SDG 9 on industry, innovation and infrastructure, SDG 10 on reduced inequalities, and SDG 16 on peace, justice and strong institutions. Digital financial inclusion sits at the intersection of all four: it enables economic participation, depends on digital infrastructure, determines who shares in growth, and requires trustworthy institutions to function.

Why should geopolitical tension interfere with something as seemingly domestic as whether a farmer can open a mobile wallet? The mechanisms are both direct and indirect. Directly, geopolitical crises can disrupt cross-border payment corridors, trigger capital flight, complicate compliance regimes through sanctions, and deter the foreign banks and fintech firms that often supply the technology and capital behind digital financial services. Indirectly, elevated risk raises uncertainty for households and firms alike, discouraging the formalization of savings and transactions that digital inclusion represents. The Geopolitical Risk Index used in the study captures the frequency of conflict, terrorism, and interstate tension as reported in major newspapers, providing a quantifiable proxy for the climate of uncertainty in which financial decisions are made. When that climate darkens, the study suggests, the machinery of inclusive digital finance grinds more slowly.

The institutional dimension of the analysis reinforces this interpretation. By disaggregating the World Governance Indicators and testing their individual and joint effects, alongside multicollinearity diagnostics, the researchers examined whether specific aspects of governance, such as regulatory quality, rule of law, or government effectiveness, carry distinct weight in shaping digital financial inclusion. The emphasis on institutions in their findings aligns with a growing consensus that technology alone cannot deliver financial inclusion. A mobile payment app requires a regulatory framework that permits agent networks, identity systems that verify customers, consumer protection rules that build trust, and courts that enforce contracts. Where these institutional foundations are weak or destabilized by political turmoil, digital finance struggles to take root regardless of how sophisticated the underlying technology may be.

For policymakers in developing economies, the study’s implications are pointed. First, because digital financial inclusion is highly persistent, early and sustained investment in digital ecosystems is likely to pay compounding dividends, while delays entrench exclusion. Second, attracting foreign direct investment remains a viable strategy for building inclusive digital finance, but its returns are contingent on managing geopolitical exposure. Countries that diversify their investment partnerships, strengthen governance, and insulate their financial infrastructure from external shocks are better positioned to capture the benefits of foreign capital even in a fragmented world. Third, the link to SDG 16 suggests that resilient governance is not merely a political aspiration but an economic prerequisite for equitable financial access. The authors argue that demonstrating how geopolitical instability constrains inclusive digital finance highlights the importance of resilient governance and sustainable digital ecosystems for achieving fair and widespread financial access.

The research arrives at a moment when the forces it measures are intensifying. Geopolitical fragmentation has deepened since the early 2020s, and the digitalization of finance has accelerated in parallel, making the question of how the two interact one of the defining policy puzzles of the decade. By showing that the benefits of global integration, in the form of foreign investment, are conditional on political stability, the study challenges both techno-optimists who believe digital finance will spread regardless of circumstances and skeptics who dismiss foreign investment as irrelevant to inclusion. The reality, the data suggest, is more conditional and more contingent. Digital financial inclusion can be a powerful engine of equitable growth, but its engine runs on a fuel mixture of persistent momentum, sound institutions, and foreign investment, and geopolitical risk drains all three. In a world where political shocks are increasingly frequent, building financial systems that can withstand them may be as important as building the systems themselves.

Subject of Research: The effect of geopolitical risk and foreign direct investment on digital financial inclusion across developing and developed economies

Article Title: Geopolitical risk and digital financial inclusion in short-run panel dynamics

Article References: Sharma, M., Bhardwaj, N., & Singh, M. (2026). Geopolitical risk and digital financial inclusion in short-run panel dynamics. Discover Sustainability. https://doi.org/10.1007/s43621-026-04514-w

Image Credits: AI Generated

DOI: 10.1007/s43621-026-04514-w

Keywords: digital financial inclusion, geopolitical risk, foreign direct investment, panel data, dynamic GMM, financial access, sustainable development goals, governance indicators, developing economies, fintech, World Bank Findex, economic growth

The study, published in the journal Discover Sustainability, was conducted by Suprianik Suprianik and colleagues at Universitas Jember in Indonesia, together with Zainul Hasan, now based at Airlangga University in Surabaya. The team set out to answer a deceptively simple question: in the countries that dominate global palm oil production, what actually drives sustainable development? To do so, they assembled panel data covering eight major crude palm oil-producing economies over a twenty-seven-year window, from 1996 to 2022, drawing on the World Bank’s World Development Indicators and the Worldwide Governance Indicators databases.

Measuring sustainable development is notoriously difficult, and the authors made a deliberate methodological choice that sets their work apart. Rather than relying on a single environmental metric or a composite index of uncertain provenance, they used Adjusted Net Savings, a World Bank indicator that captures whether a nation is genuinely building wealth for future generations. The measure starts with gross national savings and then adjusts for education spending, depletion of forests, minerals, and energy resources, and damage from carbon dioxide emissions and particulate pollution. In effect, it asks whether a country is consuming its natural capital faster than it is investing in its people and institutions—a question that cuts to the heart of the palm oil debate.

The explanatory variables were chosen to reflect the central tensions of commodity-driven economies. Permanent cropland intensity served as a proxy for how intensively land is devoted to agriculture, capturing the land-use pressure associated with plantation expansion. GDP per capita represented the level of economic development. Regulatory quality, drawn from the Worldwide Governance Indicators, measured the perceived ability of governments to formulate and enforce sound policies. Renewable energy consumption, expressed as a share of total final energy use, tracked progress along the energy transition. Together, these four variables formed the analytical backbone of the study.

The econometric machinery behind the findings is considerable. Because countries differ in their economic structures and because shocks in one economy can spill over into others, the authors needed methods that could handle both heterogeneity and cross-sectional dependence. Their baseline approach was the Pooled Mean Group Autoregressive Distributed Lag model, known as PMG-ARDL, which estimates short-run dynamics and long-run equilibrium relationships simultaneously while allowing the coefficients to vary across countries. To guard against spurious results, they ran two robustness checks—the Common Correlated Effects Mean Group and Augmented Mean Group estimators—both of which explicitly account for cross-country interdependence. The tests confirmed a stable long-run relationship among the variables, meaning the results describe a genuine equilibrium rather than a statistical accident.

The headline finding is striking in its simplicity: in the long run, regulatory quality and renewable energy consumption are positively associated with sustainable development, while permanent cropland intensity and GDP per capita show no significant direct relationship in the baseline model. In other words, stronger institutions and cleaner energy move the needle on Adjusted Net Savings, but neither the sheer intensity of cropland use nor the level of income per person does so on its own. That result challenges the intuition that palm oil prosperity translates automatically into sustainable development, and it equally challenges the assumption that plantation expansion is always the decisive driver of environmental outcomes in these economies.

The short-run picture adds an important nuance. When the authors examined year-to-year dynamics, renewable energy consumption emerged as the most consistent positive association with improved sustainable development outcomes. This suggests that the energy transition is not merely a long-term aspiration for palm oil economies but a lever that delivers measurable benefits within the span of a few years. The robustness estimations generally confirmed the direction of the main relationships, lending confidence that the pattern holds even when the statistical treatment of cross-country dependence and heterogeneous national responses is varied.

Why would regulatory quality matter so much? The authors’ interpretation, grounded in the logic of the indicator, is that well-functioning institutions shape how commodity wealth is managed. Governments capable of enforcing environmental standards, designing credible land-use policies, and resisting short-term capture can channel palm oil revenues into education, infrastructure, and resource stewardship rather than allowing depletion to erode the national balance sheet. Adjusted Net Savings is precisely the kind of measure that rewards such stewardship: a country that harvests its forests faster than it invests in human capital will see the indicator fall, even if GDP is rising. Institutions, in this framing, are the mechanism that converts commodity-based activity into long-term wealth accumulation.

The findings arrive at a moment when palm oil-producing economies face intensifying international scrutiny. Importing markets increasingly demand certified sustainable production, deforestation-free supply chains, and credible climate commitments, while domestic pressures—haze from land clearing, biodiversity loss, and the social costs of plantation expansion—continue to test public tolerance. The study’s results imply that the most effective responses are not simply agronomic. Strengthening regulatory institutions and accelerating the shift to renewable energy appear to be the variables most tightly linked to sustainable development outcomes, suggesting that governance and energy policy deserve at least as much attention as yield improvement and certification schemes.

For policymakers in Indonesia, Malaysia, and the other major producers covered by the analysis, the practical implications are concrete. Investments in renewable energy capacity—solar, geothermal, hydro, and bioenergy—offer a dual dividend: they reduce the carbon and pollution penalties that drag down Adjusted Net Savings while insulating economies from volatile fossil fuel imports. Meanwhile, reforms that raise regulatory quality, from transparent concession licensing to consistent enforcement of environmental law, provide the institutional scaffolding on which sustainable land management depends. The authors caution that their results describe associations across a panel of countries rather than causal effects in any single nation, and the absence of a significant direct link between cropland intensity and sustainable development in the baseline model suggests that the land-use question is mediated by other factors, likely including the very institutions the study highlights.

The research also carries a broader lesson for development economics. Commodity dependence is often portrayed as a curse, but this study reframes the problem: the curse is not the commodity itself but the failure to convert its proceeds into durable wealth. By showing that renewable energy and regulatory quality are the variables most consistently associated with sustainable development across nearly three decades of data, the authors offer a quantitative foundation for a policy agenda that treats the energy transition and institutional reform as inseparable from agricultural strategy. As the global palm oil industry confronts mounting environmental expectations, the evidence suggests that the producers who thrive will be those that transform plantation wealth into sustainable wealth—and that the transformation begins in the ministries and power grids as much as in the fields.

Subject of Research: The relationship between cropland intensity, regulatory quality, renewable energy consumption, and sustainable development in major crude palm oil-producing countries

Article Title: The roles of cropland intensity, regulatory quality, and renewable energy in major palm oil-producing economies

Article References: Suprianik, S., Viphindrartin, S., Zainuri, Z., Wilantari, R. N., & Hasan, Z. (2026). The roles of cropland intensity, regulatory quality, and renewable energy in major palm oil-producing economies. Discover Sustainability. https://doi.org/10.1007/s43621-026-04890-3

Image Credits: AI Generated

DOI: 10.1007/s43621-026-04890-3

Keywords: palm oil, sustainable development, adjusted net savings, regulatory quality, renewable energy, cropland intensity, PMG-ARDL, panel data, governance indicators, energy transition, land use, Indonesia

The timing could hardly be more consequential. Sub-Saharan Africa remains the world’s least gender-equal region, with an economic parity index estimated at just 68.5 percent and a gender inequality ratio exceeding 0.5. Burkina Faso sits squarely within this pattern. According to the World Economic Forum’s global gender gap data, the country achieves 90.3 percent parity in educational attainment and 97.8 percent in health and survival, but only 67.4 percent parity in participation in economic opportunities. The 2019 national census adds a sobering layer: the overall literacy rate stands at 31.9 percent, with men at 36 percent and women at just 27.9 percent, while women’s unemployment has averaged roughly 6 percent over the past five years according to World Bank figures.

To test whether the money flowing into and within the economy was changing this picture, the researchers assembled annual time-series data from the World Bank’s World Development Indicators and the International Country Risk Guide. They measured women’s economic participation through the ratio of female to male labor force participation, foreign direct investment as a share of GDP, and net national savings as an indicator of an economy’s self-financing capacity. Institutional quality was captured through a composite index built from six World Governance Indicators, spanning rule of law, voice and accountability, regulatory quality, political stability, control of corruption, and government effectiveness, with weights determined by principal component analysis to avoid the multicollinearity problems that plague these strongly correlated measures.

The econometric backbone of the study is an autoregressive distributed lag, or ARDL, model, a technique chosen for good reason. Unlike classical cointegration methods, ARDL can handle variables that are stationary at different orders of integration, a property confirmed here by Dickey-Fuller and Phillips-Perron unit root tests showing some series stationary in levels and others only in first differences. It also suits relatively small samples, and this one, spanning 35 annual observations, qualifies. The optimal lag structure, selected with the Akaike Information Criterion, produced a specification of ARDL(4, 3, 4, 2, 3), and the bounds test confirmed a long-run equilibrium relationship among the variables. The model fit was striking, with a coefficient of determination of 0.95, though the authors are careful to note the small sample when interpreting that figure.

The headline result is unambiguous. In the long run, foreign direct investment carries a positive coefficient of 0.482, but the effect on women’s economic participation is statistically insignificant. Net national savings, by contrast, delivers a coefficient of 2.716, positive and statistically significant, roughly five and a half times the size of the FDI effect. The explanation, the authors argue, lies in the structure of the Burkinabe economy. FDI flows have risen from less than 0.01 percent of GDP in the 1980s to a peak of 2.40 percent between 2011 and 2015 before easing to 1.32 percent, but they remain concentrated in the mining sector, an industry that is highly capital-intensive and generates few jobs for women. Weak linkages between foreign firms and the domestic productive base further dampen any spillover effects on female employment.

Domestic savings tell a different story precisely because of where they go. Women in Burkina Faso are overwhelmingly employed in agriculture and the informal sector, parts of the economy that attract little foreign capital but benefit directly from domestically financed development programs in education, vocational training, financial inclusion, women’s entrepreneurship, and small and medium-sized enterprises. Savings also represent a more stable and sovereign source of funding, insulating development finance from the volatility of global capital markets. The finding echoes earlier work by Bolarinwa and Obembe, who showed that domestic savings play a key role in financing productive investment across sub-Saharan Africa, and contrasts with Zandile and Phiri’s evidence of negligible direct FDI effects on growth in Burkina Faso.

The study’s most striking twist involves institutional quality, which the authors model not as a simple control but as a moderator interacting with both capital sources. Here the interactions between foreign direct investment and institutional quality, and between net national savings and institutional quality, are both positive and statistically significant in the long run. In plain terms, the same dollar of foreign investment or the same franc of domestic savings buys more economic opportunity for women when institutions are effective, transparent, and accountable. Graphical analyses of the interaction effects show the relationship clearly: at low institutional quality, additional FDI yields only modest gains, while at high institutional quality the positive correlation steepens dramatically. The pattern aligns with the institutional economics of North and of the 2024 Nobel laureates Acemoglu, Johnson, and Robinson, whose work argues that inclusive institutions determine whether resources are converted into broad-based prosperity.

The short-run dynamics add an important nuance. Net national savings and institutional quality show negative short-run effects but positive long-run ones, a divergence the researchers attribute to adjustment rather than contradiction. Higher savings temporarily reduce current consumption, and institutional reforms take time before their benefits materialize. Meanwhile, the negative and significant error correction term, estimated at roughly 0.503, indicates that about half of any short-run disequilibrium is corrected within a single period, implying a relatively rapid return to the long-run equilibrium path. Robustness checks using the fully modified ordinary least squares estimator and an alternative dependent variable, the index of women’s economic rights, broadly confirm the baseline conclusions.

The policy implications are concrete. The authors recommend directing foreign investment toward sectors with high potential for women’s employment, including agribusiness, agricultural value chains, local product processing, digital services, and light manufacturing. They call for domestic savings mobilization to be paired with expanded financial inclusion for women, through access to formal banking, affordable credit, digital financial services, and tailored savings products. Most fundamentally, they argue that institutional reform, from simplified administrative procedures to anti-corruption mechanisms and the digitization of public services, is the lever that amplifies everything else. In a country where government effectiveness has improved only marginally, from minus 0.85 to minus 0.83 on a scale running from minus 2.5 to plus 2.5, the message is that governance itself is a form of capital. The study does have limits, as its authors acknowledge: national aggregates mask regional and sectoral heterogeneity, and the analysis cannot capture structural breaks linked to Burkina Faso’s recent political upheavals. But its core finding stands as a challenge to both aid-dependent and investment-attraction strategies alike: empowering women financially may begin not with foreign money, but with what a nation manages to save, and with the institutions trusted to put those savings to work.

Subject of Research: The effects of foreign direct investment and net national savings on women's economic participation in Burkina Faso, moderated by institutional quality

Article Title: Do foreign direct investment and net national savings promote women’s access to economic opportunities in Burkina Faso? the moderating role of institutional quality

Article References: Ouedraogo, A. R., & Ouedraogo, S. S. (2026). Do foreign direct investment and net national savings promote women’s access to economic opportunities in Burkina Faso? the moderating role of institutional quality. Discover Global Society, 4(1), Article 257. https://doi.org/10.1007/s44282-026-00608-y

Image Credits: AI Generated

DOI: 10.1007/s44282-026-00608-y

Keywords: Burkina Faso, foreign direct investment, net national savings, institutional quality, gender economics, women's economic empowerment, ARDL model, governance indicators, development economics, sub-Saharan Africa, labor force participation, foreign

The paper, authored by Hatta Ridho, Husni Thamrin, Solahuddin Nasution, Arief Marizki Purba, and Mujahid Widian Saragih, introduces the Green Tourism Transition Management framework, or GTTM. Built from a narrative synthesis of fifty peer-reviewed studies published between 2024 and 2026, the framework consolidates three indicator domains that the existing literature has tended to examine in isolation: policy coherence, digital innovation, and community resilience. The authors’ central claim is deliberately provocative for the field: these three drivers are not substitutable levers from which managers can pick and choose, but jointly reinforcing conditions that produce transformative outcomes only when activated together. Policy coherence without digital enablement yields well-intentioned but operationally weak governance; digital innovation without community embeddedness risks deepening platform-economy inequality; and community resilience without supportive policy and digital infrastructure remains locally bounded and institutionally fragile.

The first domain, policy coherence, addresses the alignment of objectives, instruments, and institutional mandates across levels and sectors of government. Tourism intersects with climate policy, land use planning, transportation, culture, and social protection in ways that rarely fall under a single ministry. Evidence reviewed in the paper shows that destination governance performance correlates strongly with the degree to which national tourism policy is integrated with sub-national implementation capacity and cross-sectoral regulatory coherence. Where this integration is absent, destinations can hold impressive policy documents while environmental quality deteriorates and social inequalities widen on the ground. Research on Destination Management Organizations across the ten best-performing tourism countries in the Travel and Tourism Development Index identifies mandatory inter-ministerial coordination mechanisms as a key differentiator between high- and low-performing destinations, creating structural conditions for coherence that do not depend on the goodwill of individual officials.

The costs of policy incoherence are documented with particular clarity in Indonesia’s Super-Priority Destination of Labuan Bajo. There, national green tourism ambitions were undermined by absent coordination between the national tourism ministry, regional government, and community governance structures. Investment flowed into high-end resort infrastructure while community-based tourism enterprises remained undercapitalized, and environmental monitoring systems were installed without the community governance capacity needed to act on their data. The result was a destination that looked green on paper but continued to degrade environmentally while failing to deliver promised community benefits. By contrast, West Sumatra’s regional tourism master plan, known as RIPPDA, was designed from the outset as a coordination mechanism requiring alignment between provincial strategy, district spatial planning, and community development plans, and research documents measurably better coherence outcomes than in destinations relying on ad hoc inter-governmental coordination.

The second domain, digital innovation, has been reframed over the past decade from a marketing tool into a structural governance enabler. The authors draw a crucial technical distinction between digitization, meaning doing the same things with digital tools, and digital innovation, meaning doing fundamentally different things because of digital capabilities. Smart tourism infrastructure, artificial intelligence, and data analytics allow destination managers to monitor environmental conditions in real time, allocate visitor flows algorithmically, and integrate sustainability reporting across the value chain. But the evidence shows digital investment translates into sustainability benefits only when accompanied by smart governance capacity, the institutional capability to act on the data collected. Destinations that install sensor networks, visitor management apps, and AI analytics without building the governance structures to use them see limited benefits. Micro-level studies of digital leadership in hospitality firms reinforce this point: businesses with digitally competent managers are significantly more likely to convert digital investment into reduced energy consumption, lower waste, and improved environmental compliance, a mechanism the literature describes as green absorptive capability.

Bali provides the most extensively studied case of digital-sustainability integration in a developing country context. Research reviewed in the paper shows digital platforms facilitating circular economy flows in tourism supply chains, tracking material inputs, connecting suppliers of sustainably certified products, and giving tourists real-time information on the environmental footprint of their choices. Studies of Bali’s tour and travel small and medium enterprises report that green dynamic capabilities and green service innovation, both enabled by digital tools, mediate between organizational capabilities and sustainability performance, with firms combining digital investment and green service redesign outperforming those pursuing either strategy alone. Beyond Bali, e-tourism platforms have opened previously isolated destinations to global markets, as demonstrated in the Albanian town of Belsh, where platform access transformed the economic viability of a rural destination lacking conventional tourism infrastructure. Digital inclusion, the authors argue, can function as a spatial equity mechanism when designed to reach peripheral communities rather than concentrating capability in established hubs.

The third domain, community resilience, captures the capacity of host communities to absorb shocks, adapt to change, and transform in response to shifting environmental and economic conditions. The synthesis identifies economic resilience, including household income diversification, local ownership of tourism assets, and financial reserves, as the strongest predictor of sustainability outcomes, followed by social resilience measured through trust, collective action, and cultural identity, and then ecological resilience. A systematic review of institutional barriers to community-based tourism governance identifies six categories of constraint, legal, financial, informational, organizational, political, and cultural, with legal and financial barriers consistently the most binding. This implies that effective support for community resilience requires structural changes in land tenure, access to finance, and legal recognition of community enterprises, not merely capacity-building programs. Heritage-based community tourism offers strong supporting evidence: communities with strong cultural heritage governance institutions achieve better sustainability outcomes than those where heritage management is left to commercial operators, because community control allows sustainability norms to be embedded directly into the visitor experience.

To translate the framework into practice, the authors propose a four-phase implementation roadmap. Phase one, policy alignment and diagnosis, uses multi-stakeholder governance audits to identify binding institutional restrictions and establish SDG baselines; the Labuan Bajo case shows what happens when this diagnostic stage is skipped. Phase two deploys e-tourism platforms, AI-enabled analytics, and smart destination technologies, with the governance imperative that digital investments be driven by sustainability management needs rather than technology supply pushes, and co-designed with community stakeholders. Phase three, community empowerment and co-creation, engages communities as active governance actors, activating cultural heritage assets and strengthening participatory planning. Phase four establishes monitoring, upscaling, and replication through KPI-based systems tracking policy coherence metrics, digital capability indices, and community resilience indicators alongside conventional sustainability measures. The framework aligns its outcome architecture with SDG 8 on decent work, SDG 11 on sustainable communities, SDG 12 on responsible consumption, and SDG 13 on climate action, providing an accountability structure connecting destination-level decisions with global commitments.

The authors are candid about the framework’s limits. GTTM is offered as a conceptual and taxonomic synthesis, not a statistically weighted composite index; the underlying literature reports indicators with heterogeneous definitions, units, and instruments, precluding direct aggregation. The central claim of joint reinforcement is presented as a working hypothesis consistent with predominantly cross-sectional and qualitative evidence, and establishing causality will require longitudinal research designs that track destinations over extended periods. The ten destinations examined in depth, from Bali and Labuan Bajo to rural Serbia, Albania, Egypt’s Red Sea, and luxury-destination contexts, remain a non-representative sample, and the framework has not been tested in small island states, post-conflict destinations, or hyper-commodified mass tourism settings. The authors also flag a political dimension the technical literature tends to avoid: governing the green transition means redistributing power and economic value from incumbent airlines, hotel chains, and fossil-fuel dependent infrastructure owners toward communities and ecological stewardship institutions, a process that generates resistance no measurement framework alone can overcome. Still, the paper’s conclusion is unambiguous. The green transition in tourism is a structural imperative, and the costs of inaction, environmental, social, and competitive, exceed the costs of governance transformation. The transition must be governed, the authors write, and it must be governed well.

Subject of Research: A conceptual framework for measuring the green transition in tourism through policy coherence, digital innovation, and community resilience

Article Title: Measuring the green transition in tourism: A conceptual framework integrating policy coherence, digital innovation, and community resilience for sustainable destination management

Article References: Ridho, H., Thamrin, H., Nasution, S., Purba, A. M., & Saragih, M. W. (2026). Measuring the green transition in tourism: A conceptual framework integrating policy coherence, digital innovation, and community resilience for sustainable destination management. Environmental and Sustainability Indicators, 32, Article 101519. https://doi.org/10.1016/j.indic.2026.101519

Image Credits: AI Generated

DOI: 10.1016/j.indic.2026.101519

Keywords: sustainable tourism, green transition, policy coherence, digital innovation, community resilience, destination management, smart tourism, SDGs, low-carbon tourism, governance indicators, Labuan Bajo, Bali

Using an AI-powered approach, researchers from LMU Munich and the University of Cologne analyzed 2.9 million sustainability-related indicators found in ten years of corporate reporting. The dataset spans the annual and sustainability reports of 600 of Europe’s largest listed companies, covering 2014–2023.

In total, the team reviewed roughly 9,000 PDF documents comprising about 1.7 million pages. The period was chosen to predate the EU Corporate Sustainability Reporting Directive (CSRD), meaning companies were mostly reporting under earlier rules.

To measure what would look like CSRD-aligned transparency, the researchers applied the stricter CSRD disclosure requirements retrospectively. Their method evaluated reporting coverage across environmental, social, and governance (ESG) topics by scanning for 501 defined indicators.

The analysis was conducted with a large language model—Llama-3.1-70B-Instruct—which automatically extracted and classified ESG signals from long-form texts. “Instead of relying on a few costly commercial datasets with inconsistent definitions, we can systematically track what companies actually report,” the authors note.

Results show a steep improvement in disclosure volume: the average number of reported indicators rose by 52.4% from 2014 to 2023. Companies with weaker sustainability performance also narrowed the gap, with reported indicator shortfalls shrinking from 39.4% to 6.8%, suggesting transparency is converging across firms.

But performance signals don’t tell a uniformly reassuring tale. Reported direct emissions declined substantially, while reported indirect value-chain emissions increased more than fivefold—largely because firms are now capturing and publishing more categories rather than necessarily cutting more emissions.

On social metrics, progress is also mixed. Representation of women in top management rose by 9.2 percentage points, while the gap between executive compensation and median employee wages expanded dramatically—more than twelvefold since 2014.

The researchers are releasing their dataset and code through the Sustainability Reporting Navigator open science initiative, aiming to help regulators, investors, and NGOs compare firms more consistently and spot transparency gaps.

Subject of Research: Assessing corporate sustainability disclosure and performance using large language models across ESG indicators.
Article Title: Assessing corporate sustainability with large language models: evidence from Europe
News Publication Date: 7-Jul-2026
Web References: https://doi.org/10.1038/s41467-026-75160-z
References: Nature Communications (DOI: 10.1038/s41467-026-75160-z)
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Keywords: corporate sustainability reporting, CSRD, ESG disclosure, climate data, value chain emissions, large language models, transparency gaps, AI text mining