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Does better governance foster efficiency? An aggregate frontier analysis

  • Pierre-Guillaume Méon
  • Laurent Weill

We test the relationship between governance and macroeconomic technical efficiency on a sample of 62 countries, both developed and developing. We do so by applying Battese and Coelli (1995)’s method at the aggregate level. We find that better governance, measured by six complementary indices each devoted to a different dimension of governance, is always associated with greater efficiency. However, when governance variables are tested against each other, we observe that government efficiency is the aspect of governance that most robustly affects aggregate efficiency. Copyright Springer-Verlag Berlin/Heidelberg 2004

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Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/8368.

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Date of creation: Mar 2005
Date of revision:
Publication status: Published in: Economics of Governance (2005) v.6 n° 1,p.75-90
Handle: RePEc:ulb:ulbeco:2013/8368
Contact details of provider: Postal: CP135, 50, avenue F.D. Roosevelt, 1050 Bruxelles
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