An Augmented Environmental Kuznets Curve (EKC) and a New Measure for Water Pollution – Evidence From Africa

Water pollution constitutes an increasingly urgent problem worldwide. This study investigates an augmented Environmental Kuznets Curve (EKC) considering trade and institutional quality for water pollution in Africa. Using data from 2002 to 2016 for 42 African countries, we employ static and dynamic panel estimation techniques. As a novel feature, we use newly estimated data on water pollution from the WorldQual model, the global water quality model of the WaterGAP3 Framework. We find evidence for an EKC relationship using static but not dynamic estimation techniques. Our results suggest that institutional quality is pollution-increasing, while the effect of trade on water pollution is inconclusive. Moreover, we find that the interaction term of institutional quality and trade is pollution-decreasing. Thus, at high levels of trade, an increase in institutional quality is associated with less water pollution, while at low levels of trade, an increase is associated with high pollution