Corruption, Violence, and the Rule of Law Affecting Regulatory Control: Forecast Evaluation

Arvian Triantoro, Khalid Zaman, Sriyanto Sriyanto, Hailan Salamun, Shabnam Shabnam, Sasmoko Sasmoko, Yasinta Indrianti, Abdul-Rashid Abdul-Aziz and Mohd Khata Jabor
Additional contact information
Arvian Triantoro: Universitas Pendidikan Indonesia, Kota Bandung, Jawa Barat 40154, Indonesia
Khalid Zaman: The University of Haripur, Haripur Khyber Pakhtunkhwa, Pakistan
Sriyanto Sriyanto: Universitas Muhammadiyah Purwokerto, Jawa Tengah, 53182, Indonesia
Hailan Salamun: Centre for Foundation and Continuing Education (PPAL), Universiti Malaysia Terengganu (UMT), 21300, Kuala Nerus, Terengganu, Malaysia
Shabnam Shabnam: National Institute of Technology (NIT), Kurukshetra, 136119, Haryana, India
Sasmoko Sasmoko: Bina Nusantara University, Jakarta 11489, Indonesia
Yasinta Indrianti: Podomoro University, 11470, Jakarta, Indonesia
Abdul-Rashid Abdul-Aziz: Universiti Sains Islam Malaysia, Nilai 71800, Negeri Sembilan, Malaysia
Mohd Khata Jabor: Universiti Teknologi Malaysia (UTM), Skudai 81310, Johor, Malaysia

HSE Economic Journal, 2022, vol. 26, issue 1, 145–164

Abstract: Political challenges, unfairness, and dishonesty are the governing issues that need substantial reforms to improve the high regulatory quality standards. The study's objective is to examine the impact of corruption, violence, and the rule of law on Pakistan's regulatory control. The study used four forecasting techniques, i.e., Root Mean Square Error (RSER), Mean Absolute Error (MAE), Mean Absolute Percentage Error (MAPE), and Theil inequality coefficient, on the available data series from 1996–2019. The study first obtained the forecast factors of the stated variables by using the Vector Autoregressive (VAR) technique and then used these variables in the least-squares regression technique to obtain the forecast parameter estimates. The simulation results show that corruption, violence, and the rule of law would likely negatively affect the country's regulatory control. The ex-ante analysis shows that the corruption level increases sharply reaches its highest point, and becomes constant. The rule of law initially decreases and then begins to rise steeply. Regulatory control initially decreases and is likely to in­crease at a decreasing rate. Finally, political stability is likely to decrease over the time horizon. Innovation accounting matrix estimates show that corruption would likely change the country's regulatory control, followed by the rule of law and violence in the next ten years. The study is the first to explore the dynamics of governance indicators in an inter-temporal setting. The study concludes that the country should devise broad-based governance reform policies to eliminate the high incidence of corruption, violence, and injustice and move forward to­wards implementing regulatory control for sustained growth.

Keywords: corruption; violence; rule of law; regulatory control; forecast evaluation; Pakistan (search for similar items in EconPapers)
JEL-codes: D73 K40 (search for similar items in EconPapers)
Date: 2022
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