The Determinants of Governance: A Global Analysis

Konstantinos Rontos, Maria-Eleni Syrmali, Ioannis Vavouras
International Journal of Finance, Insurance and Risk Management, Volume 5, Issue 2, 868, 2015
DOI: 10.35808/ijfirm/122


The scope of the paper is to explore the underlying determinants of governance quality at the global level. The study suggests that cross-country variation in governance is mainly attributed to differences not only in countries’ level of economic development but to the range of political freedom and level of social development. More specifically, the impact of economic development is stronger for the control of corruption, the rule of law and regulatory quality as far as the examined governance dimensions are concerned. Political development is strongly related to political stability and absence of violence as well as voice and accountability. A very interesting finding is the high correlation of social development, as depicted by the relevant human development index, with the level of government effectiveness. Therefore, strengthening and maintaining governance is achieved only through the adoption and effective implementation of the appropriate long-run policies. In a similar vein, concrete policy guidelines lie at the core of the good governance agenda. The associated reforms target a broad list of comprehensive governance objectives in order to achieve government effectiveness, anti-corruption safeguards, high standards of legitimacy and accountability, among other attributes of governance systems.

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