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Inclusive Human Development and Governance Nexus: Causality Analysis of Selected Asian Countries

Author

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  • Tasos Stylianou

    (Department of Economics, International Hellenic University, Dimitriou Poliorkitou 65, PC 54633 Thessaloniki, Greece)

  • Rakia Nasir

    (Department of Economics and Statistics, University of Management and Technology, Lahore 54770, Punjab, Pakistan)

  • Muhammad Waqas

    (Department of Economics, University of Sargodha, Sargodha 40100, Punjab, Pakistan)

Abstract

This study investigates the role of governance in inclusive human development in the case of twenty-four selected Asian countries, using panel data for the time period from 2010 to 2017. The inequality-adjusted human development index, developed by the United Nation Development Program, has been used as a proxy for inclusive human development. In addition, six indicators of governance have been used as independent variables in a regression model, along with three control variables. We have tested the stationarity of our data using panel unit root tests such as Leviv-Lin-Chu and Augmented Dickey Fuller. The Pearson correlation matrix helps us find out the correlation among variables. The findings show a mixed level of correlation among the variables (i.e., high, low, and moderate). Furthermore, our results show that a strong causal relationship among the variables exists. One of the most important findings is that there is bi-directional causality between the inclusive human development index (IHDI) and development expenditure. The IHDI causes more government investment in development projects, whereas more development expenditure in the country achieves a higher IHDI. Trade openness and development expenditure have a bi-directional causal relationship. Finally, economic governance causes political governance in the case of our selected Asian countries.

Suggested Citation

  • Tasos Stylianou & Rakia Nasir & Muhammad Waqas, 2023. "Inclusive Human Development and Governance Nexus: Causality Analysis of Selected Asian Countries," Economies, MDPI, vol. 11(3), pages 1-14, March.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:3:p:97-:d:1101593
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    References listed on IDEAS

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    1. Dobdinga C. Fonchamnyo & Boniface N. Epo & Giyoh G. Nginyu & Simplice A. Asongu, 2023. "The effects of institutional quality and biocapacity on inclusive human development in Sub-Saharan Africa," Working Papers 23/044, European Xtramile Centre of African Studies (EXCAS).

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