Environment, Human Development and Economic Growth

Over the last few years, environmental issues have entered into policy design, particularly development and growth policies. Natural resources are considered necessary production inputs and environmental quality is considered a welfare determinant. The integration of environmental issues into economic growth and development theories and empirics is currently widely analyzed in the literature. The effects of natural resources endowment on economic growth are mainly analyzed through the so-called Resource Curse Hypothesis (RCH) whereas the effects of economic growth on environmental quality are part of the Environmental Kuznets Curve (EKC). Furthermore, recent contributions on RCH and EKC have shown the important role of institutions and human development dimensions in building a sustainable development path. In this paper, we attempt to analyze the causal relationships between economic growth, human development and sustainability combining the RCH and EKC models and adopting a human development perspective. Results confirm the importance of high institutional quality and investments for human capital accumulation in order to build a sustainable development path.