How Does State Fragility Drive Environmental Degradation? A Multidimensional Analysis of Governance and Socio‐Economic Vulnerabilities

ABSTRACT The growing crises in the environmental sector worldwide have increased the call for better comprehension of the linkage among governance, socio‐economic stability, and environmental degradation. In this respect, state fragility—a term covering governance gaps, political instability, and economic turmoil—has emerged as a vital and rather unexplored cause of environmental degradation. This study examines how state fragility drives environmental degradation by analyzing the Fragile States Index (FSI) and PM2.5 air pollution across 130 countries from 2006 to 2020. Using generalized least squares (GLS) and Lewbel (2012) heteroskedasticity‐based IV estimators, we disaggregate FSI into cohesion, economic, political, social, and external‐intervention dimensions to identify heterogeneous effects. Results show that higher overall fragility is associated with increased PM2.5 and CO2 emissions, with economic and political fragility exerting the strongest positive impacts. Social pressures and external interventions also worsen air quality, while cohesion's effect is context‐dependent—positive in baseline GLS but negative after addressing endogeneity—suggesting measurement and endogeneity issues. Controls reveal trade openness tends to raise pollution, whereas FDI and stronger institutions reduce it. Findings are more pronounced in low‐income countries, underscoring sample heterogeneity. Policy implications stress strengthening governance, mobilizing green finance, and aligning external assistance with environmental objectives to break the fragility–pollution nexus.