Evaluation of the Relation between Water Pollution and Economic Growth in Developing Countries and Developed Countries

Abstract

Most studies suggest a form of inverted U relationship between environmental quality and economic growth, entitled as "the environmental Kuzne's curve (EKC)" Given the importance of maintaining environmental quality along with economic growth, this study studies the level of water pollution and economic growth both in developing and developed countries during 2001-1980. Based on theoretical foundations of environmental EKC curve, as in addition to the income variable, the population variable, is also considered as an exogenous variable and the integration method is used for estimating the model. The results indicates that the economic conditions prevailing in both groups of countries are consistent with the EKC. Curve and it this curve. The turning point in developed countries is at 10,622 dollars based on statistical findings, most of the studied countries in this group have crossed the turning point. But as for developing countries, the turning point in this curve is estimated at approximately 901 dollars of national per capita income. Statistical analysis of existing data showed that many countries at this group still have not reached the turning point of the EKC curve and are far from it. Using the results, it seems necessary for the developing countries to adopt more cautious policies to grow and develop their economies, in order to promote the growth of national per capita income, as well as policies to improve quality of water resources, or at least prevent their contamination.

Keywords

• economic growth
• environmental quality
• water pollution
• developing countries
• developed countries