Is economic growth still driving municipal waste? Evidence from European Union and Western Balkan Countries

Municipal waste generation remains a key obstacle to Europe's transition towards a circular economy and to the achievement of Sustainable Development Goal 12, particularly in macro-regions where European Union (EU) Member States coexist with Western Balkan countries. The Adriatic-Ionian region provides a critical testing ground to assess whether economic growth continues to translate into higher municipal waste generation or whether meaningful decoupling has begun to emerge. This paper examines the extent to which municipal waste generation is driven by economic development between 2008 and 2023, and whether the underlying drivers differ between EU Member States and Western Balkan countries. Using a balanced panel of eight countries, the analysis combines fixed-effects econometric modelling with a decoupling assessment and a regional interaction approach. Results indicate that, once country-specific and time-specific factors are accounted for, economic growth alone does not systematically increase municipal waste generation. In contrast, environmental protection expenditure consistently reduces waste levels, underscoring the central role of policy effort. The analysis also reveals pronounced regional differences. These findings are directly relevant to SDG 12 and offer actionable evidence for three domains of application: (1) for EU cohesion and pre-accession policy design, supporting the case for prioritising environmental funding in Western Balkan countries; (2) for macro regional governance under European Union Strategy for the Adriatic-Ionian Region (EUSAIR), where the evidence of distinct waste growth regimes calls for differentiated decoupling strategies; and (3) for national waste management planning, where investments in environmental awareness and tertiary education should complement infrastructure development to accelerate waste prevention.