Abstract Democracy is often seen as a catalyst for sustainable development and a cornerstone of effective development strategy. This study examines how democracy is associated with sustainable development using a panel of 133 countries over 2000–2021. Unlike much of the existing literature that relies on single indicators such as GDP or CO 2 emissions, we use the Sustainable Development Index (SDI), a composite measure that captures human well-being and ecological sustainability. The study uses Feasible Generalized Least Squares (FGLS) to address cross-sectional dependence, heteroscedasticity, and serial correlation. To ensure the robustness of long-run relationships, panel Co-integration techniques are employed, followed by Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) estimators to correct for endogeneity and serial correlation. To capture heterogeneity across countries, we also apply Panel Quantile Regression (PQR), which estimates democracy’s effect at different points of the SDI distribution, allowing the relationship to vary between low-, middle-, and high-SDI countries. The results show that liberal democracy has a positive and statistically significant effect on the SDI across all income groups on average, with the strongest impacts in high- and low-income economies. Local governance capacity (LGI) is positively associated with sustainability in low-income countries, but its effects are negative or statistically insignificant in middle- and high-income groups. Social exclusion (ESGI) negatively influences sustainability in most cases, while urbanization consistently enhances SDI. Natural resource rents (NRGDP) have heterogeneous effects, positive in low-income economies but negative in richer ones, suggesting differences in resource governance. Media corruption (MC) is similarly mixed: modestly positive in developing countries, yet negative in upper-middle-income economies. Quantile regression shows democracy boosts SDI across quantiles, strongest at the lower and upper tails. The results suggest that sustainability depends on governance quality, inclusive institutions, and structural conditions, implying that policies strengthening democratic accountability can also enhance ecological and social resilience.
Choudhary et al. (Fri,) studied this question.