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Good Governance, Welfare, and Transformation

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  • Hans-Jurgen Wagener

Abstract

Market conforming institutions are a precondition for a thriving and stable economy. This is the upshot of the Washington consensus or, of somewhat earlier origin, the "Eucken hypothesis" Another hypothesis of Eucken has it that market conforming institutions are the product of a strong state. However, more general and more important than the strong state is good governance. In this paper I refer to it as the "Lorenzetti hypothesis". The paper tries to figure out the mechanisms by which good governance and economic order influence economic outcome. Then the two hypotheses are tested for two aspects of economic outcome: productivity as measured by GNP per capita over a wide range of countries and transformation success as measured by GNP growth over the European transformation countries. The tests confirm the theoretical expectation that good governance is more important than good order

Suggested Citation

  • Hans-Jurgen Wagener, 2004. "Good Governance, Welfare, and Transformation," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(1), pages 127-143, June.
    • Handle: RePEc:liu:liucej:v:1:y:2004:i:1:p:27-143
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    References listed on IDEAS

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    1. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
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    7. Rodrik, Dani, 1997. "The 'paradoxes' of the successful state," European Economic Review, Elsevier, vol. 41(3-5), pages 411-442, April.
    8. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
    9. International Monetary Fund, 2000. "Institutions Matter in Transition, But so do Policies," IMF Working Papers 2000/070, International Monetary Fund.
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    Cited by:

    1. Friedrich Schneider (ed.), 2011. "Handbook on the Shadow Economy," Books, Edward Elgar Publishing, number 13432, March.
    2. Hans-Jürgen Wagener, 2009. "Why Europe? On comparative long-term growth," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 6(2), pages 287-323, December.
    3. Lotfalipour, Mohammad Reza & sargolzaie, Ali & Salehnia, Narges, 2022. "Natural resources: A curse on welfare?," Resources Policy, Elsevier, vol. 79(C).
    4. Rudra P Pradhan, 2011. "Good governance and human development: Evidence form Indian States," Journal of Social and Development Sciences, AMH International, vol. 1(1), pages 1-8.
    5. Lawrence Sáez, 2013. "Methods in governance research: a review of research approaches," Global Development Institute Working Paper Series esid-017-13, GDI, The University of Manchester.
    6. Benno Torgler & Friedrich Schneider & Alison Macintyre, 2011. "Shadow Economy, Voice and Accountability, and Corruption," Chapters, in: Friedrich Schneider (ed.), Handbook on the Shadow Economy, chapter 14, Edward Elgar Publishing.

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    More about this item

    Keywords

    Governance; Economic order; Development;
    All these keywords.

    JEL classification:

    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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