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Estimating the Quality of Economic Governance: A Cross-Country Analysis

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  • Sudip Ranjan Basu

    (Graduate Institute of International Studies HEI , Geneva)

Abstract

This paper proposes a methodology to combine different dimensions of economic governance into a combined index. The quality of economic governance index (QEGI) is estimated as the weighted average of principal components of the standardised economic governance indicators, where weights are variances of successive principal components. The paper reports the QEGI for 71 developing and transition economies in 1998-2000. The evidence from a simple scatter diagram and a cross country regression analysis indicates that the better economic governance positively affects the economic performance (e.g., rise in per capita income, decline in poverty level, etc.) for sample of countries in our analysis.

Suggested Citation

  • Sudip Ranjan Basu, 2005. "Estimating the Quality of Economic Governance: A Cross-Country Analysis," Econometrics 0509012, EconWPA.
  • Handle: RePEc:wpa:wuwpem:0509012
    Note: Type of Document - pdf; pages: 31. pdf format
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    File URL: http://econwpa.repec.org/eps/em/papers/0509/0509012.pdf
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    References listed on IDEAS

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    1. Sen, Amartya, 1988. "The concept of development," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 1, pages 9-26 Elsevier.
    2. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    3. Daniel Kaufmann & Aart Kraay, 2002. "Growth without Governance," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Fall 2002), pages 169-230, August.
    4. William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423, January.
    5. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
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    Cited by:

    1. Zhou, X. & Li, Kui-Wai, 2010. "Causality between Openness and Indigenous Factors among World Economies," MPRA Paper 36421, University Library of Munich, Germany.
    2. Li, Kui-Wai & Zhou, Xianbo, 2008. "The Commutative Effect and Casuality of Openness and Indigenous Factors Among World Economies," MPRA Paper 35298, University Library of Munich, Germany.
    3. Sudip Ranjan Basu, 2005. "The Determinants of Economic Well-being:An Application in the Indian States," Development and Comp Systems 0509009, EconWPA.

    More about this item

    Keywords

    Economic governance; Economic performance; Cross-country analysis; principal component.;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation

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