Does Governance Cause Growth? Evidence from China

Wilson, Ross

doi:10.1016/j.worlddev.2015.11.015

Cited by 73 publications

(64 citation statements)

References 70 publications

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“…There are few studies that investigated the governance-to-economic performance causal relationship and contradict the conclusions resulted from most of the previous papers which argue the positive influence of good governance on economic development [24]. The author of this study confirms a positive correlation between governance and economic growth, but he concludes that is not necessary to consider the quality of governance as a key factor, determinant for economic performance.…”

Section: The Country-level Governance Versus Economic Growth-backgroucontrasting

confidence: 68%

“…As one author admits [24], the causal relationship from economic growth to changes in the quality of governance has received less interest in the previous literature, even if there are some reasons to suppose that improvements in economic growth is often followed by the increasing of quality of governance. Increasing the level of economic growth is supposed to generate improvements in the quality of governance, because economic performance can deliver the necessary financial resources to implement expensive reforms required by the complex process of improving the quality of governance [24,38,39,44].…”

Section: Results Of the Granger Non-causality Tests For Gdp-gov_avgmentioning

confidence: 99%

“…A benefit of our paper is taking in consideration both directions of causality between country-level governance and economic growth, while most of the previous studies focused only on one direction, mostly from governance to economic development [9,24]. One relevant study in this field which investigated both directions of causality between the quality of governance and economic performance is conducted by an author [24], who uses Chinese provincial-level data covering 20 years. The major difference in our empirical analysis is the usage of country-level data.…”

Section: Results Of the Granger Non-causality Tests For Gdp-gov_avgmentioning

confidence: 99%

“…The correlation between the quality of economic and political institutions and economic performance has been the objective of many cross-country empirical studies [6,[24][25][26], while only few papers are addressing the impact of bureaucratic professionalization and effectiveness of government on economic growth [24,27]. There is a general consensus among economists and policymakers about the role of institutions in influencing economic development, while some author admits that "there is increasing recognition that corruption and other aspects of poor governance and weak institutions have substantial, adverse effects on economic growth" [28] (p. 3).…”

Section: The Country-level Governance Versus Economic Growth-backgroumentioning

confidence: 99%

“…The author of this study confirms a positive correlation between governance and economic growth, but he concludes that is not necessary to consider the quality of governance as a key factor, determinant for economic performance. Even more, the same author has demonstrated a positive influence of economic growth on subsequent quality of governance, therefore he suggests that more attention should be paid to analyze the possible reverse causality between governance and economic growth, particularly in cross-country analyses [24].…”

Section: The Country-level Governance Versus Economic Growth-backgroumentioning

confidence: 99%

See 4 more Smart Citations

The Bidirectional Causality between Country-Level Governance, Economic Growth and Sustainable Development: A Cross-Country Data Analysis

et al. 2018

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Abstract:In the context of contemporary society, characterized by the information users' growing and differentiated needs, the way country-level governance and social responsibility contribute to the ensuring of sustainable economic development is a concern for all the actors of the economic sphere. The aim of this paper is to test the causal linkages between the quality of country-level governance, economic growth and a well-known indicator of economic sustainable development, for a large panel of world-wide countries for a period of 10 years (2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015). While there are some prior studies that have argued the bidirectional causality between good public governance and economic development, this study intends to provide a new focus on the relationship between country-level governance and economic growth, on one hand, and between country-level governance and adjusted net savings, as a selected indicator of economic sustainable development, on the other hand. Four hypotheses on the causal relationship between good governance, economic growth and sustainable development were tested by using Granger non-causality tests. Our findings resulting from Granger non-causality tests provide reasonable evidence of Granger causality from country-level governance to economic growth, but from economic growth to country-level governance, the causality is not confirmed. In what regards the relationship between country-level governance and adjusted net savings, the bidirectional Granger causality is not confirmed. The main implication of our study is that improving economic growth and sustainable development is a very challenging issue, and the impact of macro-level factors such as country-level governance should not be neglected.

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Section: The Country-level Governance Versus Economic Growth-backgroucontrasting

confidence: 68%

Section: Results Of the Granger Non-causality Tests For Gdp-gov_avgmentioning

confidence: 99%

Section: Results Of the Granger Non-causality Tests For Gdp-gov_avgmentioning

confidence: 99%

Section: The Country-level Governance Versus Economic Growth-backgroumentioning

confidence: 99%

Section: The Country-level Governance Versus Economic Growth-backgroumentioning

confidence: 99%

See 3 more Smart Citations

The Bidirectional Causality between Country-Level Governance, Economic Growth and Sustainable Development: A Cross-Country Data Analysis

et al. 2018

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The mitigating effect of governance quality on the finance‐renewable energy‐growth nexus: Some international evidence

Kassi

Dong

2021

Int. J Fin Econ

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This study analyses the conditional effect of governance quality on the finance‐renewable energy‐growth nexus in 123 countries from 1990 to 2017. We built composite indexes of financial development and governance quality through the principal component analysis (PCA) using several financial variables and governance indicators. We employed the generalized method of moments (GMM) and the two‐stage least squares (2SLS) techniques, but also the Granger non‐causality in Dumitrescu and Hurlin (2012). First, the disaggregated analysis shows that renewable energy consumption, financial inclusion, financial efficiency, and financial stability have positive marginal effects on economic growth under a good governance quality, except for financial depth. Second, the aggregated analysis confirms the positive marginal impact of financial development on growth only in low‐income economies, whereas renewable energy consumption has positive marginal effects only in lower‐middle‐income and upper‐middle‐income economies. Finally, the results of the causality analysis differ among countries. Overall, governance quality has a threshold effect on the finance‐renewable energy‐growth nexus, which varies across countries. Accordingly, our study suggests more improvements in the governance quality in these countries, especially in the low‐income and high‐income countries, to enhance the marginal impacts of financial development and renewable energy consumption on growth.

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Inclusive human development effect of financial inclusion in sub‐Saharan Africa: A gender perspective

Dianda,

Ouedraogo,

Sawadogo

2024

J of Intl Development

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This paper investigates the effect of financial inclusion on inclusive human development in a panel of 35 countries in sub‐Saharan Africa for the years 2011, 2014 and 2017 from a gender perspective. Different methods, including fixed effect and random effect models, Tobit and quantile regressions, are used for the estimates. We find that financial inclusion improves inclusive human development. In addition, the effect of women's financial empowerment is stronger than that of men. Moreover, we find a complementary effect of financial account ownership and mobile money usage in the achievement of inclusive human development. Furthermore, the increasing effects of financial inclusion are greater in countries with lower inclusive human development than those with higher inclusive human development. African governments should therefore improve financial inclusion, particularly female financial inclusion, to achieve higher inclusive human development.

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Does Governance Cause Growth? Evidence from China

Abstract: This article is published in World Development, 79 (2016), pp. 138-151. Please refer to the link below for the most up-to-date version on the publisher's website.

Cited by 73 publications

References 70 publications

The Bidirectional Causality between Country-Level Governance, Economic Growth and Sustainable Development: A Cross-Country Data Analysis

The Bidirectional Causality between Country-Level Governance, Economic Growth and Sustainable Development: A Cross-Country Data Analysis

The mitigating effect of governance quality on the finance‐renewable energy‐growth nexus: Some international evidence

Inclusive human development effect of financial inclusion in sub‐Saharan Africa: A gender perspective

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