Do Governance Indicators Explain Development Performance? A Cross-Country Analysis
Han, Xuehui; Khan, Haider; Zhuang, Juzhong | November 2014
Abstract
The central question addressed by this study is whether countries with above-average governance grew faster than countries with below-average governance. Using the World Bank’s worldwide governance indicators to measure governance performance, it examines whether a country with governance “surplus” in a given base year (1998) grew faster on average in a subsequent period (1998- 2011) than a country with governance “deficit.” Governance is defined in several dimensions, including government effectiveness, political stability, control of corruption and regulatory quality, voice and accountability, and rule of law. The study finds that government effectiveness, political stability, control of corruption and regulatory quality all have a more significant positive impact on country growth performance than voice and accountability and rule of law. Developing Asian countries with a surplus in government effectiveness, regulatory quality and corruption control are observed to grow faster than those with a deficit in these indicators—up to 2 percentage points annually, while Middle East and North African countries with a surplus in political stability, government effectiveness, and corruption control are observed to grow faster than those with a deficit in these indicators by as much as 2.5 percentage points annually. Good governance is associated with both a higher level of per capita GDP as well as higher rates of GDP growth over time. This suggests that good governance, while important in and of itself, can also help in improving a country’s economic prospects.
Citation
Han, Xuehui; Khan, Haider; Zhuang, Juzhong. 2014. Do Governance Indicators Explain Development Performance? A Cross-Country Analysis. © Asian Development Bank. http://hdl.handle.net/11540/4213. License: CC BY 3.0 IGO.ISSN
2313-6537
Keywords
Comprehensive Development Framework
Development Challenges
Development Planning
Millennium Development Goals
Policy Development
Program Evaluation
Performance Evaluation
Evaluation Criteria
Capital Market Development
Development Economics
Financial Sector Development
Technology Development
World Development Indicators
Evaluation Methods
Development assistance
ADB
Curriculum development
Development assistance
Development aid
Development indicators
Development potential
Development models
Project appraisal
Performance appraisal
Economic development
Economic indicators
Government programs
Economic growth
Economic policy
Industrial development
Industrial policy
Technology assessment
Economic evaluation
Economic forecast
Input output analysis
Communication in rural development
Communication in community development
Infrastructure
Central planning
Endowment of research
Partnership
Joint venture
Nation-building
Risk assessment
Economic development projects
Economic forecasting
Industrial research
Participatory monitoring and evaluation
Economic policy
Economic forecasting
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Citable URI
http://hdl.handle.net/11540/4213Metadata
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