Impact of Fiscal Policy and Governance Indicators on Sustainable Development in EU Countries

Sustainable development is recognized as one of the most critical global challenges of the 21st century. While countries pursue policies focused on economic growth and social progress, they often encounter environmental degradation that negatively impacts long-term sustainability. This issue is particularly prevalent in developed nations. Good governance, which is frequently regarded as the fourth pillar of sustainable development, plays a crucial role in influencing not only development but also economic growth, policies, and environmental sustainability. While governance is generally seen as a driver of economic stability and fiscal policies, its clear impact on environmental sustainability has not yet been established. Although countries may enhance economic growth and public welfare through good governance, the question of whether this growth is accompanied by environmental degradation remains a subject of debate. This study aims to explore the intersection of governance, fiscal policies, and environmental outcomes in the European Union (EU), a region that prioritizes good governance, using ecological footprint as an indicator of environmental degradation.