Politická ekonomie 2026, 74(3):536-559 | DOI: 10.18267/j.polek.1508

Environmental Regulations and Sustainable Development: The Role of Fiscal Decentralization and Clean Energy

Rong Wang, Xiaohan Gu, Yunqiu Zhan, Xiao Gu
Rong Wang, College of History and Law, Yulin Normal University, Yulin, China
Xiaohan Gu, Home-Tech Co.,Ltd, Suzhou, China
Yunqiu Zhan (corresponding author,), Chengdu Technological University, Yibin, China
Xiao Gu, Research Centre for the Modernisation of Governance in Urban Rural Community, Hangzhou, China

There is a growing recognition of the importance of sustainable development. Political economy factors and natural resources are considered important sources of economic prosperity. These are the fundamental primary resources utilized in the production process, which subsequently drives economic activities and results in sustained growth. Nevertheless, resource-rich countries often experience sustainability challenges. This study examines the impact of mineral resource rents on sustainable development in selected developed countries from a political economy perspective. Moreover, we include renewable energy deployment and fiscal decentralization as additional determinants of sustainable development. The study uses random-effects and fixed-effects estimation methods to estimate the model. The study also uses quantile regression econometric techniques. A sustainable development index (SDI), integrating economic, social and environmental dimensions, is constructed as the dependent variable. The results reveal that mineral resource rents and renewable energy electricity output negatively affect sustainable development. Nevertheless, environment-related taxes and fiscal decentralization positively affect sustainable development. These results provide valuable insights for academia, researchers and policy makers aiming to achieve environmental sustainability through institutional and fiscal reforms.

Keywords: Sustainable development, mineral resources, political economy, natural resources, developed countries
JEL classification: H77, O44, Q32, Q58

Received: December 8, 2024; Revised: March 31, 2025; Accepted: April 25, 2025; Prepublished online: November 12, 2025; Published: June 22, 2026  Show citation

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Wang, R., Gu, X., Zhan, Y., & Gu, X. (2026). Environmental Regulations and Sustainable Development: The Role of Fiscal Decentralization and Clean Energy. Politická ekonomie, 74(3), 536-559. doi: 10.18267/j.polek.1508
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