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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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    Citations

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    Cited by:

    1. Friedrich Schneider (ed.), 2011. "Handbook on the Shadow Economy," Books, Edward Elgar Publishing, number 13432.
    2. Lotfalipour, Mohammad Reza & sargolzaie, Ali & Salehnia, Narges, 2022. "Natural resources: A curse on welfare?," Resources Policy, Elsevier, vol. 79(C).
    3. 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.
    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. 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.
    6. 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.

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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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