Public Infrastructure, Trade Liberalization, and Sustainable Development in Cameroon: What Role Does Institutional Quality Play?

Abstract

Sustainable development in resource-dependent economies depends on how infrastructure expansion and trade integration interact with institutional capacity. This study examines the effects of public infrastructure and trade liberalisation on sustainable development in Cameroon and tests whether institutional quality plays a role in these relationships. Using annual time-series data for the period 1990 to 2023 and the Autoregressive Distributed Lag (ARDL) bounds testing approach, the study finds evidence of a stable long-run relationship among the variables (F = 6.911; p < 0.01). In the baseline model, trade openness has significant negative effects on sustainable development in both the short and long run, with coefficients of -0.3283 and -0.3554, respectively (p < 0.01), while infrastructure has a negative long-run effect (-0.0324; p < 0.10). Institutional quality has a small positive direct effect (0.0126; p < 0.10). The error correction coefficient (-0.9237; p < 0.01) indicates that approximately 92% of short-run disequilibrium is corrected within one year. However, institutional quality does not significantly moderate the effects of trade openness (TRADE × IQ = 0.0006; p = 0.602) or infrastructure (INFRA × IQ = 0.0288; p = 0.113). The findings indicate that trade expansion and infrastructure provision have not translated into improved sustainable development outcomes in Cameroon, while institutional capacity remains insufficient to condition these effects. The study recommends improving infrastructure quality and maintenance, promoting domestic value addition, and strengthening institutions governing public investment, trade, and environmental management. Future research could employ disaggregated sectoral or regional data to capture variations that may be masked by aggregate national-level data, which represents a limitation of the present study.