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Institutional Quality and Climate Vulnerability: Empirical Evidence from GCC Economies

Author

Listed:
  • Abdulrahman A. Albahouth

    (Department of Economics, College of Business and Economics, Qassim University, Buraydah 51452, Saudi Arabia)

  • Muhammad Tahir

    (Department of Economics, Abbottabad Campus, COMSATS University Islamabad, Abbottabad 22060, Pakistan)

Abstract

In recent years, the intersection of institutional quality and climate vulnerability has emerged as a critical yet largely untapped area of study, despite its profound implications for understanding resilience to environmental challenges and sustainable development. The purpose of this paper is to establish a relationship between the quality of domestic institutions and climate vulnerability in the case of “Gulf Cooperation Council (GCC)” economies. Annual data spanning the period 2002–2021 were sourced from the “World Governance Indicators (WGI)”, “World Development Indicators (WDI)”, and the “Notre Dame Global Adaptation Initiative (ND-GAIN)”, providing a valuable trace of examined variables. We have applied several econometric techniques including the “Pooled Least Squares (PLS)”, “Fixed Effects (FET)”, “Feasible Generalized Least Squares (FGLS)”, and “Two Stages Least Squares (2SLS)” to estimate the specified models and extract results. Our findings indicate that enhanced institutional quality significantly reduces climate vulnerability in GCC economies. In other words, effective climate governance practices in GCC countries have successfully mitigated climate vulnerability across these economies. The causality analysis confirmed the one-way causality running from institutional quality towards climate vulnerability. On the other hand, increased income level, urbanization, and the degree of trade openness are the major threats as their impacts on climate vulnerability are positive and statistically significant. The results obtained offer valuable insights for policymakers in GCC economies seeking to formulate effective policies addressing climate vulnerability.

Suggested Citation

  • Abdulrahman A. Albahouth & Muhammad Tahir, 2025. "Institutional Quality and Climate Vulnerability: Empirical Evidence from GCC Economies," Sustainability, MDPI, vol. 17(5), pages 1-19, February.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:5:p:2047-:d:1601037
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    References listed on IDEAS

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    1. Anis Omri & Montassar Kahia, 2024. "Natural Resources Abundance and Human Well-Being: the Role of Institutional Quality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 173(3), pages 607-644, July.
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    6. Cheng Hsiao, 2007. "Rejoinder on: Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 56-57, May.
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    Cited by:

    1. Dieudonné Mignamissi & Eric Xaverie Possi Tebeng, 2026. "From Attraction to Adaptation: How Soft Power Reduces Climate Vulnerability," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 68(1), pages 1-39, March.
    2. Pelin Okutan & Emre N. Otay, 2025. "Climate Change Risk Perception, Adaptive Capacity and Psychological Distance in Urban Vulnerability: A District-Level Case Study in Istanbul, Türkiye," Sustainability, MDPI, vol. 17(12), pages 1-29, June.
    3. Oana-Ramona Lobonț & Ana-Elena Varadi & Sorana Vătavu & Nicoleta-Mihaela Doran, 2025. "Bridges or Barriers? Unpacking the Institutional Drivers of Business Climate Adaptation in the EU," Sustainability, MDPI, vol. 17(11), pages 1-20, May.
    4. Nagwa Amin Abdelkawy & Luluh Alzuwaidi, 2025. "Institutional Quality, Energy Efficiency, and Natural Gas: Explaining CO 2 Emissions in the GCC, 2000–2023," Sustainability, MDPI, vol. 17(15), pages 1-26, July.
    5. Simplice A. Asongu & Cherif Abdramane, 2026. "Concentration of Political Power and Adaptation to Climate Change in Developing Countries: Evidence Using the Quantile Regression Method," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(S2), pages 336-350, March.
    6. Mohamed Sami Ben Ali & Alanoud Al‐Maadid & Brahim Bergougui, 2026. "Climate Change and Energy Security Risk: Do Green Patents, Institutional Quality, and Human Capital Make a Difference?," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(1), pages 165-189, February.

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