Effectiveness Of Governance Vs Social Development: A Multivariate Approach To Countries’ Classification

Effective governance is pivotal in fostering social development and economic growth in modern societies. This paper explores the intricate relationship between social progress and government administration quality, aiming to identify the critical determinants influencing countries' social progress. We hypothesise that effective governance exerts a comprehensive influence on countries' social progress and vice versa, not only at the level of partial correlation. Drawing on the Social Progress Index (SPI) and Worldwide Governance Indicators (WGI), we employ discriminant analysis to understand how different dimensions of government effectiveness contribute to social development (Androniceanu & Georgescu, 2023). The study finds that several factors significantly influence social progress, including Voice and Accountability, Political Stability, Control of Corruption, Regulatory Quality, and Government Effectiveness. By analysing data from 167 countries, we classify nations into high, medium, and low social progress groups based on SPI scores. The discriminant analysis model achieves an accuracy of 92.2% in classifying countries, indicating the robustness of the approach. Furthermore, multivariate Wilk’s Tests of Significance reveal that variables related to water and sanitation, access to basic knowledge, access to information and communications, environmental quality, personal safety, and access to advanced education are determinants of social progress. The discriminant functions derived from the analysis provide insights into the relative importance of these variables in determining countries' social progress levels. Our findings underscore the importance of effective governance in driving countries' social development outcomes. By identifying key factors that contribute to social progress, policymakers can design targeted strategies to enhance governance effectiveness and promote sustainable societal advancement. The study contributes to the existing literature by providing empirical evidence of the relationship between government efficiency and social development on a global scale.