Influence of smart governance on biodiversity and its transmission mechanisms in developing countries

This study makes a novel contribution to the literature on the effects of smart governance on biodiversity in developing countries, a field that remains underexplored and marked by inconclusive results. In particular, the mechanisms through which smart governance impacts biodiversity are still insufficiently documented. This research addresses this gap by analysing a panel of 74 developing countries over the period 2000–2023. Using system GMM estimation, the results indicate that smart governance does not exert a statistically significant direct effect on biodiversity, as measured by the ecological footprint. The analysis further reveals an inverted U-shaped nonlinear relationship between economic growth and biodiversity, with a threshold estimated at USD 2,196 per capita, beyond which rising income is associated with improved environmental indicators. However, structural equation mediation analysis uncovers substantial indirect effects through several socio-economic channels. Three transmission mechanisms prove to be decisive: smart governance positively influences biodiversity through women’s political empowerment, while urbanisation rates and energy consumption transmit negative effects. Overall, the findings suggest that smart governance can contribute to better ecological outcomes when combined with social, institutional, and economic transformations that promote citizen participation, sustainable urban planning, and the energy transition. JEL Classification : Q01, Q56, Q57, D73, O13