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Geography and governance: Does space matter?

Author

Listed:
  • Seldadyo, Harry
  • Elhorst, J. Paul
  • De Haan, Jakob

Abstract

Studies on governance generally ignore spatial dependence among the observations. Employing spatial econometric methods, we find that governance in one country exhibits a positive relationship with governance in neighbouring countries. Consequently, a change in a single explanatory variable in a particular country not only affects the level of governance in that country itself, but also in neighbouring countries. Using maximum likelihood function values and Bayesian posterior model probabilities, we also find that the spatial arrangement of the countries in the sample is best described by a spatial weights matrix based on the 10 nearest neighbours of every country in the sample.

Suggested Citation

Handle: RePEc:eee:paresc:v:89:y:2010:i:3:p:625-641
DOI: 10.1111/j.1435-5957.2009.00273.x
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JEL classification:

  • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
  • G3 - Financial Economics - - Corporate Finance and Governance
  • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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