Determinants of Growth in Fast‐Developing Countries: Evidence from Bundling and Unbundling Institutions

Abstract

Purpose -We assess growth determinants in the BRICS (Brazil, Russia, India, China and South Africa) and MINT (Mexico, Indonesia, Nigeria and Turkey) fast-developing nations for the period [2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011]. Particular emphasis is laid on the bundling and unbundling of ten governance dynamics.Design/methodology/approach-Contemporary and non-contemporary Fixed-and RandomEffects regressions are employed as empirical strategies. GDP growth and real GDP output are used as dependent variables. The governance variables are bundled by means of principal component analysis. Findings-The following are some findings. First, governance is more positively significant in non-contemporary specifications as opposed to contemporary regressions. Second, there is some interesting evidence on the heterogeneity of political governance as a driver. Political governance and its constituents (political stability and voice & accountability) are significantly positive in GDP growth but insignificant in real GDP output regressions. Third, the other governance dynamics are more significant determinants of real GDP output, as opposed to GDP growth. Accordingly, they are insignificant in contemporary regressions and negatively significant in non-contemporary regressions for GDP growth. Fourth, the constituents of economic governance have the highest magnitude in the positive effects of governance dynamics on real GDP output. Practical implications-The following are some practical implications. First, lag determinants are necessary for growth targeting or timing of growth dynamics. Growth drivers for the most part are more significantly determined by past information. Second, political governance is the most important driver of economic growth, with the significance of effects more apparent in non-contemporary regressions. Third, economic governance and institutional governance are more positively predisposed to driving real GDP output than GDP growth.Originality/value-As far as we have reviewed, it is the first study to investigate growth determinants in the BRICS and MINT nations. It has strong implications for other developing countries on the contemporary and non-contemporary dynamics of governance in driving economic prosperity.1 Simplice A. Asongu is Lead economist in the Research Department of the AGDI (asongus@afridev.org). 3JEL Classification: C52; F21; F23; O40 ; P37 Keywords: Economic Growth; emerging countries; governance AcknowledgementWe are highly indebted to Akpan Uduak for sharing his dataset.

Fighting terrorism in Africa: evidence from bundling and unbundling institutions

“…According to Asongu (2016a), governance is a multidimensional and complex phenomenon to which many definitions have been attributed. First, Dixit (2009 p.5 Tusalem (2015), governance consists of: political stability, regulation quality, rule of law, corruption-control and bureaucratic effectiveness.…”

“…This essentially builds on priorities of the two contemporary dominant models of development. Whereas the Washington Consensus prioritizes political governance, the Beijing Model places more emphasis on economic governance (Asongu 2016a). Within this framework, there is an evolving stream of literature sympathetic to the perspective that short-term governance priorities are needed to resolve Africa's poverty tragedy (Asongu and Ssozi, 2016;Asongu 2016b).…”

The Role of Openness in the Effect of ICT on Governance

“…For the purpose of brevity, we follow Asongu (2016) (Kurtz & Schrank, 2007a); a reply (Kaufmann et al, 2007a); a defense (Kurtz & Schrank, 2007b) and a rejoinder (Kaufmann et al, 2007b).…”

“…It is important to first of all define the WC and BM. According to Asongu (2016) whereas the WC can be defined as 'liberalised democracy, private capitalism and priority in political rights' and the BM is defined as 'de-emphasised democracy, state capitalism and priority in economic rights'. According to the description, the WC prioritises political governance whereas the BM places more emphasis on economic governance.…”

The role of openness in the effect of ICT on governance

“…For the purpose of brevity, we follow Asongu (2016) (Kurtz & Schrank, 2007a); a reply (Kaufmann et al, 2007a); a defense (Kurtz & Schrank, 2007b) and a rejoinder (Kaufmann et al, 2007b).…”