Nexuses between Governance Quality on Industrial Growth: A Fresh Insight from Developing Economies (original) (raw)
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Quality of government is a precondition for economic growth and development as it can lead to the improvement of government's work efficiency and effectiveness as well as trust from its citizen. To improve its quality, the government needs to complete some specific functions which are combined to form the so-called "good governance". This governance is defined by various functions of government and its positive influence on economic growth has been proved by previous works of many scholars. Although the overall picture of the linkage between governance and economic growth has been derived, it is still valuable to elaborate more on the linkage between each composition of governance and the growth of the economy. Thus, in this work, we represent such linkage by proving the linkage between some functions defined by governance, namely corruption control, regulatory quality improvement, and accountability creation, and economic growth. To meet our objective, we utilized the data of 10 ASEAN countries from the World Bank database which covers the period between 1996 and 2018 and the panel regression technique to verify such linkage. The results produced from the cointegration test showed that corruption control and accountability were positively linked to economic growth, while the regulation quality linked negatively to economic growth. Therefore the government should focus on reducing corruption, improving accountability and optimally regulating its economy to encourage economic growth.
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Despite the large volume of studies on the direct impact of foreign direct investment on economic growth, the results remain inconclusive. This has led researchers to examine the channels through which FDI affects economic growth. Evidence suggests that institution quality can improve economic growth by increasing foreign direct investment in the host countries. As governance quality is improving in African countries during the last decade, the aim of this study is to investigate the relationship between foreign direct investment, governance quality and economic growth in 51 African countries over the period 1998-2015. The empirical evidence is based on Generalized Method of Moments. The following findings are established. First, there is an unconditional positive effect of foreign direct investment on economic growth in African countries. We also find a positive and significant relationship between governance quality and economic growth. Second, these findings are still robust when...
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This study sought to explore the relationship between good governance and economic growth among the East Africa Community (EAC) countries. The study utilized panel data to analyse six major World Bank governance indicators namely: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption effect on economic growth in the respective country and region for the period 1999-2013. The Random effect model (REM) and Ordinary Least Square (OLS) estimation techniques were employed for comparative analysis. The study showed that among the governance indicators, political stability, quality regulatory and control of corruption were significant. The first two indices were negatively related to economic growth rate while the latter was positively related to economic growth rate. From the OLS models, voice and accountability had a significant effect on economic growth rate in Kenya and Uganda. The qual...