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Does better governance foster efficiency? An aggregate frontier analysis

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Author Info
Pierre-Guillaume Méon ()
Laurent Weill ()

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Abstract

We test the relationship between governance and macroeconomic technical efficiency on a sample of 62 countries, both developed and developing. We do so by applying Battese and Coelli (1995)’s method at the aggregate level. We find that better governance, measured by six complementary indices each devoted to a different dimension of governance, is always associated with greater efficiency. However, when governance variables are tested against each other, we observe that government efficiency is the aspect of governance that most robustly affects aggregate efficiency. Copyright Springer-Verlag Berlin/Heidelberg 2004

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File URL: http://hdl.handle.net/10.1007/s10101-004-0080-z
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Publisher Info
Article provided by Springer in its journal Economics of Governance.

Volume (Year): 6 (2004)
Issue (Month): 1 (January)
Pages: 75-90
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Handle: RePEc:spr:ecogov:v:6:y:2004:i:1:p:75-90

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Related research
Keywords: Governance; macroeconomic efficiency frontiers; income;

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  1. Bjørnskov, Christian, 2005. "Political Ideology and Economic Freedom," Working Papers 05-8, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
  2. Pierre-Guillaume Méon & Friedrich Schneider & Laurent Weill, 2007. "Does taking the shadow economy into account matter to measure aggregate efficiency?," Working Papers DULBEA 07-18.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
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  3. Laurent Weill, 2008. "On the inefficiency of European socialist economies," Journal of Productivity Analysis, Springer, vol. 29(2), pages 79-89, April. [Downloadable!] (restricted)
  4. Christian Bjørnskov & Nicolai Foss, 2008. "Economic freedom and entrepreneurial activity: Some cross-country evidence," Public Choice, Springer, vol. 134(3), pages 307-328, March. [Downloadable!] (restricted)
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  5. Maria Del Mar Salinas-Jimenez & Javier Salinas-Jimenez, 2006. "Corruption and Productivity Growth in OECD Countries," ERSA conference papers ersa06p99, European Regional Science Association. [Downloadable!]
  6. Pierre-Guillaume Méon & Laurent Weill, 2006. "Does financial intermediation matter for macroeconomic efficiency?," Working Papers DULBEA 06-13.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA). [Downloadable!]
    Other versions:
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