Fiscal decentralization is perceived as a viable strategy for fostering economic growth in Pakistan. Concerns persist regarding its potential impact on environmental quality, particularly in relation to increased carbon emissions. Employing diverse analytical methods such as structural vector autoregressive (SVAR) modeling and autoregressive moving average model evaluations, this study comprehensively explores the dynamic relationships among fiscal decentralization, economic development, and environmental quality over the period 1979–2019. Intriguing trends emerge, revealing positive correlations between environmental efficiency and variables, including revenue collection, tax autonomy, and transfer payments. Conversely, a negative correlation is observed between government spending and economic growth. The interplay of these variables results in oscillations in the influence of fiscal decentralization on carbon emissions, presenting a complex challenge for policymakers. Notably, positive fiscal decentralization shocks lead to an increase in carbon emissions, while positive expenditure decentralization and economic development correlate with decreased carbon emissions. Despite economic growth's statistically significant negative impact on carbon emissions, the intricate nature of the relationships underscores the complexity of the link between fiscal decentralization, economic expansion, and environmental outcomes. From a policy perspective, the study emphasizes the need to adjust fiscal policies and coordinate intergovernmental fiscal ties across all government levels to enhance environmental efficiency. These findings provide policymakers with valuable insights to navigate the intricate landscape of fiscal decentralization and its environmental implications.

This study explores the effect of regulatory governance on financial stability using cross-sectional data from 55 countries. The findings show that regulatory governance and various subcomponents of regulatory governance are positively correlated with financial stability in the selected countries. The results, based on the ordinary least square method, explain that the regulatory governance has a significant positive influence on financial stability in the selected countries. Further, concerning different dimensions of regulatory governance, it is showed that an individual impact of all components on financial stability is positive except for the strength of external audit, and supervisory independence and accountability. However, central bank`s independence and economic independence have a statistically significant effect on financial stability, whereas central bank accountability, supervisory independence and accountability, political central bank independence as well as the strength of external audit have an insignificant statistical influence on financial stability. Finally, the study concludes that regulatory governance and individual dimension of regulatory governance played the most significant role in improving financial stability in the selected countries.

The increasing challenges posed by global warming underscore the need to examine the contributing factors comprehensively. This study explores the complex interaction that enhances the financial autonomy of local governments (fiscal decentralization), the evolution of financial development, and the dynamics of the environment in China, India, and Pakistan, which are known as highly populated economies. This search fills a vacuum in the research literature by using financial development and fiscal decentralization together to measure the complex interaction by using the broad dataset that spans the years 1979–2019. It significantly advances scientific knowledge by highlighting the frequently disregarded triangle formed by fiscal decentralization, financial development, and environmental quality in emerging nations. Moreover, the study seeks to elucidate how fiscal decentralization affects financial growth and, in turn, the environment. The review acknowledges the possibility of varying results among nations. Strict econometric techniques that consider slope heterogeneity and cross-sectional dependence are used to guarantee the reliability of studies and conclusions. The results show that government money and GDP per capita have beneficial short-term effects on environmental quality. Simultaneously, financial growth positively and negatively impacts several factors, underscoring the complex dynamics at work in these crucial areas. Anticipated outcomes might provide a significant understanding of the fundamental factors influencing environmental quality in developing nations. This research is well-positioned to support the development of evidence-based policies by advising scholars and decision-makers on creating successful climate change mitigation plans.