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Governance and Growth in Developing Countries

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  • Azmat Gani

Abstract

This paper examines whether governance matters for the economic growth of developing countries, empirically captured within the institutional economics theoretical framework using the panel data estimation procedure. In doing so, it tests the effect of several dimensions of governance on the growth of 84 low and middle-income economies using regression specifications common in the growth literature. The empirical results show that political stability and government effectiveness is significantly positively correlated with growth. Voice and accountability and corruption are statistically significantly negatively correlated with growth. The regulatory quality and rule of law dimensions of governance are negatively but statistically insignificantly correlated with growth. The findings of this study imply that the dynamics of the current modern economy makes it necessary for developing countries to act now and within their own country, improve the dimensions of governance and establish good governance practices that are domestically relevant and internationally comparable and consistent.

Suggested Citation

  • Azmat Gani, 2011. "Governance and Growth in Developing Countries," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(1), pages 19-40.
  • Handle: RePEc:mes:jeciss:v:45:y:2011:i:1:p:19-40 DOI: 10.2753/JEI0021-3624450102
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    File URL: http://hdl.handle.net/10.2753/JEI0021-3624450102
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    References listed on IDEAS

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    1. Pier Francesco Asso & Luca Fiorito, 2008. "Was Frank Knight an Institutionalist?," Review of Political Economy, Taylor & Francis Journals, vol. 20(1), pages 59-77.
    2. repec:mes:jeciss:v:18:y:1984:i:4:p:1027-1048 is not listed on IDEAS
    3. repec:mes:jeciss:v:34:y:2000:i:2:p:291-303 is not listed on IDEAS
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    Cited by:

    1. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2016. "The Mobile Phone in the Diffusion of Knowledge for Institutional Quality in Sub-Saharan Africa," World Development, Elsevier, vol. 86(C), pages 133-147.
    2. repec:kap:netnom:v:18:y:2017:i:2:d:10.1007_s11066-017-9118-6 is not listed on IDEAS
    3. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "The Impact of Terrorism on Governance in African Countries," World Development, Elsevier, vol. 99(C), pages 253-270.
    4. repec:kap:jincot:v:17:y:2017:i:3:d:10.1007_s10842-016-0240-1 is not listed on IDEAS
    5. Asongu, Simplice & Tchamyou, Vanessa, 2015. "Foreign aid, education and lifelong learning in Africa," MPRA Paper 70240, University Library of Munich, Germany.
    6. 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.
    7. Simplice A. Asongu & Nicholas Biekpe, 2017. "Government quality determinants of ICT adoption in sub-Saharan Africa," Netnomics, Springer, vol. 18(2), pages 107-130, December.
    8. Simplice Asongu & Ndemaze Asongu, 2017. "The role of mobile phones in governance-driven technology exports in Sub-Saharan Africa," Working Papers 17/036, African Governance and Development Institute..
    9. Simplice Asongu & Jacinta Nwachukwu, 2017. "The Role of Openness in the Effect of ICT on Governance," Working Papers 17/050, African Governance and Development Institute..
    10. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2016. "The role of governance in mobile phones for inclusive human development in Sub-Saharan Africa," Technovation, Elsevier, vol. 55, pages 1-13.
    11. Asongu Simplice & Jacinta C. Nwachukwu, 2015. "Foreign aid instability and bundled governance dynamics in Africa," Working Papers 15/058, African Governance and Development Institute..
    12. Simplice Asongu & Oasis Kodila-Tedika, 2016. "Fighting African conflicts and crimes: which governance tools matter?," International Journal of Social Economics, Emerald Group Publishing, vol. 43(5), pages 466-485, May.
    13. Ioana-Sorina Mihuţ & Larisa-Nicoleta Pop, 2016. "Evaluating the economic governance in terms of convergence: the case of the European Union," International Journal of Economics and Accounting, Inderscience Enterprises Ltd, pages 156-173.
    14. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Fighting Capital Flight in Africa: Evidence from Bundling and Unbundling Governance," Journal of Industry, Competition and Trade, Springer, vol. 17(3), pages 305-323, September.
    15. Simplice A. Asongu, 2014. "Linkages between investment flows and financial development: Causality evidence from selected African countries," African Journal of Economic and Management Studies, Emerald Group Publishing, vol. 5(3), pages 269-299, August.
    16. Simplice Asongu & Jacinta C. Nwachukwu, 2016. "Mobile phones, Institutional Quality and Entrepreneurship in Sub-Saharan Africa," Working Papers 16/044, African Governance and Development Institute..

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