Effects of Country Governance, Market-Oriented Institutional Quality, and Financial Development on Climate Action: Evidence from MENA Countries

This study investigates the effects of country governance, market-oriented institutional quality, and financial development on climate change adaptation and mitigation, using data from fifteen MENA countries spanning 2002 to 2022. Results indicate that country governance improves both adaptation and mitigation across the board. However, high market-oriented institutional quality hinders both, suggesting that economic freedom reinforces fossil fuel dependence. Financial development yields mixed results. It undermines adaptation in low-income countries but aids both adaptation and mitigation in high-income countries. These results help policymakers tailor climate strategies by income level and guide the financial and institutional reforms required for MENA’s low-carbon transition.