Sustainable development and openness in oil-exporting countries: green growth and brown growth

Abstract

What is the nexus between sustainability and openness? This study employs econometric methods to estimate a neoclassical growth model, considering brown and green growth as two pillars of sustainability, in ten oil-exporting countries during 1990–2012. Based on the results, the nexus is non-linear and U-shaped, depending on the level of openness. From the green growth viewpoint, the current relationship of sustainability with openness is negative in the sample, but it becomes positive in the higher levels of openness. From the brown growth perspective, not only the current relationship of openness with sustainability is positive, but also it can become stronger in the higher level of openness. They are proofs for the openness acting as a catalyst for sustainability in the sample. All the oil-exporting countries are suggested to open their economy wider and wider since the sustainability and openness nexus either is already positive or it becomes positive in the higher degrees of openness. So, sustainability is a flimsy pretext to discourage the openness since it is a positively effective strategy in the long-term, notwithstanding its potentially negative effects in the short-run which creates a gap.