Investigating the Triad of Fiscal Policy, Governance, and Trade: A Panel Study of Sustainable Development in Sub‐Saharan Africa

ABSTRACT This study investigates the effects of fiscal policy and governance on sustainable development (SD) in 46 Sub‐Saharan African (SSA) countries from 2000 to 2020 and whether trade openness moderates these relationships under the African Continental Free Trade Area (AfCFTA). Using a multidimensional framework, we examine SD across social, economic, and environmental dimensions, employing 2SLS, Method of Moments Quantile Regression (MM‐QR), quadratic regression with threshold diagnostics, and Driscoll‐Kraay estimators. Results reveal that fiscal investment in health and education improves social outcomes at lower development levels, although these benefits diminish beyond identifiable thresholds. General government expenditure and government revenue also exhibit significant non‐linear effects across the economic and environmental dimensions. Government effectiveness, regulatory quality, and corruption control consistently exhibit distinct threshold‐dependent relationships across social, economic, and environmental dimensions, highlighting the importance of institutional quality for SD. Trade openness weakens the effectiveness of fiscal influence while conditioning governance impact, with the environmental outcomes being the most responsive. These findings support institutional and green Keynesian theories and highlight pollution haven risk. The study provides new evidence on the threshold‐dependent effects of fiscal policy, governance, and trade openness in SSA. Practically, this study underscores the need for context‐specific fiscal strategies and long‐term institutional investments to align national efforts with the SDGs.