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Governance matters

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Author Info

  • Kaufmann, Daniel
  • Kraay, Aart
  • Zoido-Lobaton, Pablo

Abstract

In a cross-section of more than 150 countries, the authors provide new empirical evidence of a strong causal relationship from better governance to better development outcomes. They base their analysis on a new database containing more than 300 governance indicators compiled from a variety of sources. They provide a detailed description of each of these indicators and sources. Using an unobserved components methodology (described in the companion paper by the same authors,"Aggregating Governance Indicators,"Policy Research Working Paper 2195), they then construct six aggregate indicators corresponding to six basic governance concepts: voice and accountability, political instability and violence, government effectiveness, regulatory burden, rule of law, and graft. As measured by these indicators, governance matters for development outcomes.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2196.

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Date of creation: 31 Oct 1999
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Handle: RePEc:wbk:wbrwps:2196

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Related research

Keywords: Banks&Banking Reform; Decentralization; Health Economics&Finance; Corruption&Anitcorruption Law; Public Sector Corruption&Anticorruption Measures; Health Economics&Finance; National Governance; Statistical&Mathematical Sciences; Governance Indicators; Economic Policy; Institutions and Governance;

References

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  1. Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 1998. "Regulatory Discretion and the Unofficial Economy," American Economic Review, American Economic Association, vol. 88(2), pages 387-92, May.
  2. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
  3. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  4. Dani Rodrik, 1997. "TFPG Controversies, Institutions, and Economic Performance in East Asia," NBER Working Papers 5914, National Bureau of Economic Research, Inc.
  5. A. Chong & C. Calderón, 2000. "Causality and Feedback Between Institutional Measures and Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 69-81, 03.
  6. Kaufmann, Daniel & Wei, Shang-Jin, 1999. "Does 'Grease Money' Speed Up the Wheels of Commerce?," MPRA Paper 8209, University Library of Munich, Germany.
  7. Vito Tanzi & Hamid Reza Davoodi, 1997. "Corruption, Public Investment, and Growth," IMF Working Papers 97/139, International Monetary Fund.
  8. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  9. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  10. Loayza, Norman A., 1997. "The economics of the informal sector : a simple model and some empirical evidence from Latin America," Policy Research Working Paper Series 1727, The World Bank.
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