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Governance and Growth Revisited

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  • Harry Seldadyo
  • Emmanuel Pandu Nugroho
  • Jakob De Haan

Abstract

Recent studies yield diverging outcomes on the governance‐growth relationship. In this paper we construct a new index of governance using a latent variable approach and test whether this index is related to growth with varying samples of countries and different conditioning variables. The results show that our index has a positive and significant impact on economic growth. This conclusion is fairly robust for various samples and conditioning variables.

Suggested Citation

  • Harry Seldadyo & Emmanuel Pandu Nugroho & Jakob De Haan, 2007. "Governance and Growth Revisited," Kyklos, Wiley Blackwell, vol. 60(2), pages 279-290, May.
  • Handle: RePEc:bla:kyklos:v:60:y:2007:i:2:p:279-290
    DOI: 10.1111/j.1467-6435.2007.00372.x
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    References listed on IDEAS

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    1. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2006. "Governance matters V: aggregate and individual governance indicators for 1996 - 2005," Policy Research Working Paper Series 4012, The World Bank.
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    Cited by:

    1. Walter Buhr, 2009. "Infrastructure of the Market Economy," Volkswirtschaftliche Diskussionsbeiträge 132-09, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    2. Arbache, Jorge & Go, Delfin S. & Page, John, 2008. "Is Africa's economy at a turning point?," Policy Research Working Paper Series 4519, The World Bank.
    3. Robert Gillanders & Karl Whelan, 2014. "Open For Business? Institutions, Business Environment and Economic Development," Kyklos, Wiley Blackwell, vol. 67(4), pages 535-558, November.
    4. Tao Kong, 2011. "Governance Quality and Economic Growth," ANU Working Papers in Economics and Econometrics 2011-537, Australian National University, College of Business and Economics, School of Economics.
    5. Jeroen Klomp & Jakob De Haan, 2008. "Effects of Governance on Health: a Cross‐National Analysis of 101 Countries," Kyklos, Wiley Blackwell, vol. 61(4), pages 599-614, November.
    6. Kim, Dong-Hyeon & Wu, Yi-Chen & Lin, Shu-Chin, 2018. "Heterogeneity in the effects of government size and governance on economic growth," Economic Modelling, Elsevier, vol. 68(C), pages 205-216.
    7. Alisher Akhmedjonov & Irina N. Il’ina & Carol S. Leonard & Zafar Nazarov & Evgenij E. Plisetskij & Elena S. Vakulenko, 2013. "Russia’s regions: governance and Well-being, 2000-2008," HSE Working papers WP BRP 42/EC/2013, National Research University Higher School of Economics.
    8. Berggren, Niclas & Bergh, Andreas & Bjã˜Rnskov, Christian, 2012. "The growth effects of institutional instability," Journal of Institutional Economics, Cambridge University Press, vol. 8(2), pages 187-224, June.
    9. Thibaut Dort & Pierre-Guillaume Méon & Khalid Sekkat, 2014. "Does investment spur growth everywhere? Not where institutions are weak," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 67(4), pages 482-505, October.
    10. Daniel Horgos & Klaus W. Zimmermann, 2010. "It Takes Two to Tango: Lobbies and the Political Business Cycle," Kyklos, Wiley Blackwell, vol. 63(3), pages 383-399, August.
    11. Christian Bjørnskov, 2011. "Combating Corruption: On the Interplay between Institutional Quality and Social Trust," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 135-159.
    12. Simplice A. Asongu & Samba Diop, 2021. "Human development and governance in Africa: do good fences make good neighbours?," Research Africa Network Working Papers 21/051, Research Africa Network (RAN).
    13. Jiandang Liu & Jie Tang & Bo Zhou & Zhijun Liang, 2018. "The Effect of Governance Quality on Economic Growth: Based on China’s Provincial Panel Data," Economies, MDPI, vol. 6(4), pages 1-23, October.
    14. Derek Headey, 2008. "The Principal Components of Growth in the Less Developed Countries," Kyklos, Wiley Blackwell, vol. 61(4), pages 568-598, November.
    15. Victor Nee & Sonja Opper, 2009. "Bureaucracy and Financial Markets," Kyklos, Wiley Blackwell, vol. 62(2), pages 293-315, April.
    16. Ward, Hugh & Dorussen, Han, 2015. "Public Information and Performance: The Role of Spatial Dependence in the Worldwide Governance Indicators among African Countries," World Development, Elsevier, vol. 74(C), pages 253-263.
    17. Qamar Abbas & Li Junqing & Muhammad Ramzan & Sumbal Fatima, 2021. "Role of Governance in Debt-Growth Relationship: Evidence from Panel Data Estimations," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    18. Pfeiffer, Birte & Mulder, Peter, 2013. "Explaining the diffusion of renewable energy technology in developing countries," Energy Economics, Elsevier, vol. 40(C), pages 285-296.
    19. Lee, Weng Chang & Law, Siong Hook, 2016. "The Roles of Formal and Informal Institutions on Innovations Activity," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 50(2), pages 167-179.
    20. Harry Seldadyo & J. Paul Elhorst & Jakob De Haan, 2010. "Geography and governance: Does space matter?," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 625-640, August.
    21. Gustav Hansson, 2009. "What Determines Rule of Law? An Empirical Investigation of Rival Models," Kyklos, Wiley Blackwell, vol. 62(3), pages 371-393, August.

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