IN REFERNCE TO THE CORRELATION BETWEEN GOVERNANCE QUALITY AND HUMAN DEVELOPMENT

Yelena Dobrolyubova

Public administration issues, 2020, issue 4, 31-58

Abstract: Quality of public governance is often considered an important if not decisive factor of economic growth and social development. However, the notion of governance quality is highly contested in modern literature where sometimes opposite approaches are developed and defended. Empirical research focused on evaluating the impact of governance quality on the one hand and social and economic development - on the other, is also inconsistent with some studies demonstrating little correlation between the two. The article contributes to the current academic discussion by presenting the results of correlation analysis of the World Banks government effectiveness index and the UNDP human development index (HDI) comprising the data on life expectancy, expected and mean years of schooling, and per capita GNI. The data for 172 countries in 2000-2018 were analyzed. The results demonstrate that while the correlation of the two indices in each of the years (2000, 2010, and 2018) was high and increased with time for the total sample, it varied by country groups. The correlation is higher for countries with high government effectiveness and is significantly lower for countries with medium and low government effectiveness. Similar differences were found for most HDI components, especially for per capita GNI. In the latter case the correlation with government effectiveness is non-linear. The differences in correlation strength by country groups and HDR components suggest a two-way relationship between the variables. Thus, high level of human development achieved based on, inter alia, better government effectiveness, becomes a basis for further improvement of governance practices. The mixed results of our analysis suggest that using only subjective indicators is not sufficient for measuring governance quality and its dynamics. There is a need for further development of the existing approaches to measuring governance effectiveness based on impact indicators reflecting the key components of human development.

Keywords: governance quality; government effectiveness; human development index; evaluation; social and economic developmen; worldwide governance indicators (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:nos:vgmu00:2020:i:4:p:31-58

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