IDEAS home Printed from
   My bibliography  Save this article

Governance and economic growth in Asia


  • Huang, Chiung-Ju
  • Ho, Yuan-Hong


The study utilizes a frequency domain approach to investigate whether a Granger causality running from governance to economic growth exists in twelve Asian countries, classified as “Free”, “Partly Free”, and “Not Free” countries, over the period of 1996–2014. The empirical results show that with the exception of South Korea, “Free” countries exhibited no significant causality running from most dimensions of governance to economic growth. For “Partly Free” countries, with the exception of Indonesia and Thailand, rule of law Granger causes economic growth. As for “Not Free” countries, there exists a significant causality running from most dimensions of governance, especially for government effectiveness and rule of law, to economic growth. Generally speaking, various dimensions of governance lead to more significant economic growth in “Not Free” countries when compared to “Free” and “Partly Free” countries. The findings of this study indicate that policy makers in “Not Free” countries should opt to pay more attention on the quality of governance, specifically around government effectiveness and rule of law, in order to promote the future growth rate of real GDP per capita.

Suggested Citation

  • Huang, Chiung-Ju & Ho, Yuan-Hong, 2017. "Governance and economic growth in Asia," The North American Journal of Economics and Finance, Elsevier, vol. 39(C), pages 260-272.
  • Handle: RePEc:eee:ecofin:v:39:y:2017:i:c:p:260-272
    DOI: 10.1016/j.najef.2016.10.010

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 1065-1188, November.
    3. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
    4. Benno J. Ndulu & Stephen A. O'Connell, 1999. "Governance and Growth in Sub-Saharan Africa," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 41-66, Summer.
    5. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    6. Henri L. F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2004. "The Institutional Determinants of Bilateral Trade Patterns," Kyklos, Wiley Blackwell, vol. 57(1), pages 103-123, February.
    7. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January.
    8. María-Teresa Méndez-Picazo & Miguel-Ángel Galindo-Martín & Domingo Ribeiro-Soriano, 2012. "Governance, entrepreneurship and economic growth," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 24(9-10), pages 865-877, December.
    9. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    10. Azmat Gani, 2011. "Governance and Growth in Developing Countries," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(1), pages 19-40.
    11. Bichaka Fayissa & Christian Nsiah, 2013. "The impact of governance on economic growth in Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 47(1), pages 91-108, January-J.
    12. Roberto Rigobon & Dani Rodrik, 2005. "Rule of law, democracy, openness, and income," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(3), pages 533-564, July.
    13. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    14. Samuel Adams & Berhanu Mengistu, 2008. "Privatization, Governance and Economic Development in Developing Countries," Journal of Developing Societies, , vol. 24(4), pages 415-438, October.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Governance; Economic growth; Frequency domain; Granger causality;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H80 - Public Economics - - Miscellaneous Issues - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecofin:v:39:y:2017:i:c:p:260-272. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.