Trade and Industrialization nexus on Environmental sustainability in Tanzania; Does institutional quality matters?

Environmental health protection and sustainability is an escalating global agenda in recent years given its vitality to the sustainability of both human life and development. This study investigated the impact of trade and industrialization on environmental sustainability in Tanzania paying attention to the quality of institutions. The study deployed a quantitative time series data from 2002–2021 obtained from World Bank development indicators dataset and the Global Footprint Network (2021). Auto-regression distributed lag (ARDL) was used to estimate the impact of trade and industrialization on environmental sustainability in Tanzania while controlling for institutional quality; graphs were used to show trends of how the human activities affect the Load Capacity Factor (LCF) over time and its implications. The results indicate that, without interacting effects of institution quality (rule of law) both trade and industrialization in a short run and long run have a negative impact on environmental sustainability. However, with interaction effect of institutional quality (rule of law), both trade and industrialization promote environmental sustainability in Tanzania. Therefore, we suggest that, institutional quality is vital in shaping trade and industrialization in promoting environmental sustainability in the country especially when there is strong leadership system that implement the rule of law and good governance practices in all aspects. Besides, integrating environmental considerations into trade and industrial policies can foster sustainable economic growth while mitigating adverse environmental impacts. This approach will not only support Tanzania's commitment to sustainable development but also enhance its competitiveness in global markets by positioning it as a leader in environmentally responsible trade practices.