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Economic security, well functioning courts and a good government

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  • Dawood Mamoon

Abstract

Purpose - The purpose of this paper is to define economic security as a country's ability to redistribute incomes through a strong governance structure by practicing rule of law, eliminating corruption and a government that acts as a facilitator by formulating effective fiscal and monetary policy and regulation. Design/methodology/approach - The paper uses two stage instrumental analysis and carries out second order asymptotic tests to establish the validity of the instruments. Findings - The results suggest that courts that implement national laws effectively and punish corruption and a government that has balance budgets and investment friendly monetary policy ensures economic security by means of welfare friendly outcomes that favor the incomes of the poor and middle class. There is also evidence that redistribution takes place from rich to the poor. As a result, income and wage inequalities fall down. Originality/value - The paper adds to the literature on institutions by providing empirical evidence on the relationship between institutions and inequality.

Suggested Citation

  • Dawood Mamoon, 2012. "Economic security, well functioning courts and a good government," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(8), pages 587-611, June.
    • Handle: RePEc:eme:ijsepp:v:39:y:2012:i:8:p:587-611
    DOI: 10.1108/03068291211238446
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    Cited by:

    1. Md. Harun Ur Rashid & Noman Uddin & Md. Shariful Haque & Syed Zabid Hossain, 2022. "Good governance and tax evasion: mediating effect of socioeconomic conditions," Asia-Pacific Journal of Regional Science, Springer, vol. 6(2), pages 759-776, June.
    2. Mishchuk Ievgeniia, 2020. "Evaluation of the performance of implementation of strategic measures of ensuring economic security of enterprises," Technology audit and production reserves, Socionet;Technology audit and production reserves, vol. 2(4(52)), pages 4-10.
    3. Mamoon, Dawood, 2020. "How Capitalism and Islamic Economics Supplement Each Other," MPRA Paper 103696, University Library of Munich, Germany.
    4. Ganna Iefimova & Andrey Labartkava & Oleksiy Pashchenko, 2020. "Methodical Support Of Assessment Of The Development Of Economic Security Of The Region," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 6(5).
    5. Thales Pacific Yapatake Kossele & Li Jin Shan, 2018. "Economic Security and the Political Governance Crisis in Central African Republic," African Development Review, African Development Bank, vol. 30(4), pages 462-477, December.

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    More about this item

    Keywords

    Governance; Redistribution; Inequality; Economic stability; Laws;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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