Administrative Capacity and Political Economy of PM₂.₅ Regulation in Asia: Translating Pigouvian Theory into Environmental Governance
DOI:
https://doi.org/10.32350/jppp.51.04%20%20%20Keywords:
administrative capacity, environmental governance, environment–growth diagnostic framework, Pigouvian welfare economics, regulatory quality, PM₂.₅, Sustainable Development Goal 11.6, Asia.Abstract
This paper develops an integrated framework to explain why air quality regulation succeeds in some Asian economies but falters in others. Drawing on the principles of Pigouvian welfare economics, it conceptualizes administrative capacity as the operational mechanism that converts environmental regulation into welfare outcomes for a country. The study introduces the analytical model of the Pigouvian-Administrative Capacity Linkage Model, which records how regulatory, fiscal, and institutional dimensions mediate corrective policy effectiveness. The Environment-Growth Diagnostic Framework, adapted from the idea of Hausmann, Rodrik, and Velasco, identifies structural constrictions to PM₂.₅ regulation through low social returns, weak appropriability, and limited finances. In view of this causality, data for three categories of Asian countries is selected to endorse the strong relationship between regulatory quality and PM₂.₅ reduction, ratifying the notion that for environmental and welfare outcomes, the integration of policy way forwards with institutional capacity is extremely important, such that both go in tandem. The paper’s primary theoretical contribution is the reinforcement of administrative capacity as an endogenic variable within the Pigouvian welfare theory, linking the environmental, economic, and institutional governance relationship in a unified framework applicable to the developing Asian economies. The empirical analysis further illustrates that there is a negative relationship between regulatory quality and mortality rates attributable to ambient and household air pollution, showing that governance effectiveness and proper administration directly impacts human welfare gains. The findings conclude that administrative capacity is the driver of Pigouvian correction, offering a governance-based pathway toward achieving SDG 11.6 on clean and sustainable cities in Asia.
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