Governance quality , as a core pillar of sustainable development , is strongly shaped by countries " economic structures and resource - use patterns . Using panel data for 61 countries over 2010 - 2022 , this study examines the role of productivity in explaining governance outcomes . The results show that higher productivity has increased CO₂ emissions - used here as an inverse indicator of governance - particularly in economies heavily dependent on fossil fuels . This finding reflects the dominance of the scale effect , whereby productivity gains expand production and energy use without improving environmental efficiency . The theoretical analysis further indicates that the effect of productivity on governance is highly dependent on countries " energy mix and institutional capacity ; hence , productivity cannot be regarded as an inherently sustainability - enhancing factor . Empirical evidence also confirms that in the absence of an energy transition , productivity improvements may intensify environmental pressures rather than mitigate them . Accordingly , strengthening governance requires aligning productivity - enhancement strategies with clean - energy deployment , green taxation , and investment in low - carbon technologies . Such integration can shift productivity from a source of environmental risk to a driver of improved governance and sustainable development .