The Role of Institutional Quality in Climate Financing for Enhancing Climate Resilience and Sustainable Economic Development in Sub-Saharan Africa

Summary:  View help for Summary This study utilizes a balanced panel dataset covering 39 Sub-Saharan African countries over the period 2000 to 2022. The dataset includes key indicators across three thematic areas: climate finance, institutional quality, and development outcomes. Climate finance variables comprise mitigation-related finance (LNMRF) and climate-related finance (LNCRF), both measured in natural logarithmic form to normalize distribution and reflect elasticity. Institutional quality (INSTQI) is a composite index derived from six governance dimensions, standardized for cross-country comparability. Development outcomes are measured using three dependent variables: the Climate Resilience Index (CRI), the Inclusive Development Index (IDI), and a newly constructed Climate-Resilient Inclusive Development Index (CRIDI), which combines both resilience and inclusion metrics. Control variables include foreign direct investment (FDI, % of GDP), trade openness (log of trade as % of GDP), GDP growth (annual %), and population growth (annual %), sourced primarily from the World Bank’s World Development Indicators, OECD Climate Finance Database, and relevant institutional governance databases (e.g., Worldwide Governance Indicators). All variables are cleaned, transformed (e.g., log-linearized where appropriate), and harmonized to ensure temporal and spatial consistency. Missing data were treated using multiple imputation and interpolation techniques to preserve the panel structure. The final dataset is suitable for econometric estimation using dynamic panel models such as System GMM and EGLS (Period SUR), which correct for potential endogeneity, heteroskedasticity, and autocorrelation., This study utilizes a balanced panel dataset covering 39 Sub-Saharan African countries over the period 2000 to 2022. The dataset includes key indicators across three thematic areas: climate finance, institutional quality, and development outcomes. Climate finance variables comprise mitigation-related finance (LNMRF) and climate-related finance (LNCRF), both measured in natural logarithmic form to normalize distribution and reflect elasticity. Institutional quality (INSTQI) is a composite index derived from six governance dimensions, standardized for cross-country comparability. Development outcomes are measured using three dependent variables: the Climate Resilience Index (CRI), the Inclusive Development Index (IDI), and a newly constructed Climate-Resilient Inclusive Development Index (CRIDI), which combines both resilience and inclusion metrics. Control variables include foreign direct investment (FDI, % of GDP), trade openness (log of trade as % of GDP), GDP growth (annual %), and population growth (annual %), sourced primarily from the World Bank’s World Development Indicators, OECD Climate Finance Database, and relevant institutional governance databases (e.g., Worldwide Governance Indicators). All variables are cleaned, transformed (e.g., log-linearized where appropriate), and harmonized to ensure temporal and spatial consistency. Missing data were treated using multiple imputation and interpolation techniques to preserve the panel structure. The final dataset is suitable for econometric estimation using dynamic panel models such as System GMM and EGLS (Period SUR), which correct for potential endogeneity, heteroskedasticity, and autocorrelation.