Governance and Growth in Developing Countries

Abstract

This paper examines whether governance matters for the economic growth of developing countries, empirically captured within the institutional economics theoretical framework using the panel data estimation procedure. In doing so, it tests the effect of several dimensions of governance on the growth of 84 low and middle-income economies using regression specifications common in the growth literature. The empirical results show that political stability and government effectiveness is significantly positively correlated with growth. Voice and accountability and corruption are statistically significantly negatively correlated with growth. The regulatory quality and rule of law dimensions of governance are negatively but statistically insignificantly correlated with growth. The findings of this study imply that the dynamics of the current modern economy makes it necessary for developing countries to act now and within their own country, improve the dimensions of governance and establish good governance practices that are domestically relevant and internationally comparable and consistent. necessary for developing countries to act now and within their own country, establish good governance practices that are domestically relevant and internationally comparable and consistent.

Mobile phones, institutional quality and entrepreneurship in Sub-Saharan Africa

“…Consistent with recent entrepreneurship literature (Tchamyou, 2016; institutional governance (comprising corruption-control and the rule of law). These governance indicators which were abstracted from Kaufmann et al (2010) have been employed in recent institutional literature (see Gani, 2011;Yerrabit & Hawkes, 2015;Andrés et al, 2015;Oluwatobi et al, 2015). The mobile phone penetration rate (per 100 people) is used a policy independent variable.…”

Economic Governance and Economic Growth in South and East Asia & Pacific Region: Evidence from Systematic Literature Reviews and Meta-analysis

“…Good governance on one hand can create an environment that promotes economic activity, provides incentives to invest and economic growth. Bad governance on the other hand can have detrimental effects on economic growth by increasing transaction costs and by causing delays in the investment process (Kaufmann et al, [35], Gani,[27]). This study is motivated by increased effort from both policy makers and researchers towards understanding the overall impact of governance on economic growth and improving the governance quality in general.…”

The role of openness in the effect of ICT on governance

“…In this study, the governance indicators adopted are those of Kaufmann et al (2010) because they are the most widely employed in the literature (see Gani, 2011;Yerrabit & Hawkes, 2015;Andrés et al, 2015). For the purpose of robustness, we bundle the six governance measurements into four additional governance composite indicators.…”