Evaluating the forward-looking perspectives of environmental policy enforcement and institutional framework in the pursuit of a circular economy: A moments-quantile approach

Understanding the role of institutions and policy enforcement is crucial due to growing environmental concerns. Institutional framework and environmental policies drive the demand for sustainable practices such as recycling and sustainable use of natural resources. This study evaluates the forward-looking perspectives of environmental policy enforcement and the institutional framework in the transition to the circular economy. Panel data from thirty-eight Organisation for Economic Co-operation and Development countries from 2000 to 2022 is analyzed using the method of moments-quantile regression and bootstrap quantile regression. The empirical analysis showed that environmental policy enforcement, institutional framework, and environmental taxes positively impact the circular economy. However, the ecological footprint negatively impacts the circular economy. The findings demonstrate that efficient institutions and effective environmental policy enforcement are vital for reducing natural resource use, material waste production, emissions, and recycling and for driving sustainable practices. The study informs better policymaking, enhances institutional effectiveness, and promotes circular transition in OECD countries.