Governance Quality and Economic Growth
AbstractAmong both academics and the wider development community there seems to be a general acceptance of the value of good governance and its role in promoting economic growth. However, beyond this general statement, there is a lack of deeper theoretical understanding as to why good governance is expected to foster economic growth and how such effects may take place. We de.ne governance quality as the capacity of a government to internalize externality. A theoretical model is developed to formally integrate governance quality into an endogenous growth framework. We elucidate the underlying mechanisms, through which governance quality affects economic performance: governance quality affects the productivity of public investment and in turn has an impact on economic performance. We also highlight that the endogeneity of governance quality and development stages have strong implications for the governance-growth relationship.
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Bibliographic InfoPaper provided by Australian National University, College of Business and Economics, School of Economics in its series ANU Working Papers in Economics and Econometrics with number 2011-537.
Length: 30 Pages
Date of creation: Jan 2011
Date of revision:
Find related papers by JEL classification:
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-30 (All new papers)
- NEP-CWA-2011-05-30 (Central & Western Asia)
- NEP-FDG-2011-05-30 (Financial Development & Growth)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Nuevo gobierno: Â¿mejor gobernanza y crecimiento?
by Florentino Felgueroso in Nada Es Gratis on 2011-12-16 05:56:48
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