Legitimacy of government and governance

Imran Arif and Nabamita Dutta

Journal of Institutional Economics, 2024, vol. 20, -

Abstract: This paper highlights scholarly neglect of political legitimacy, the idea of a state's use of power in ways acceptable to its citizens. We argue that political legitimacy affects a state's ability to formulate and implement its policies, thus affecting governance. Our paper provides the first empirical evidence of the positive relationship between political legitimacy and governance. We combine novel cross-sectional data on political legitimacy and several governance indicators from 66 countries. Our results show that a one-standard-deviation increase in the legitimacy score increases the rule of law indicator by about one-third standard deviation. These results are robust across OLS, an instrumental variable method, and several other governance indicators. Moreover, our results reveal that in the presence of greater trust, political legitimacy has an enhanced impact on governance.

Date: 2024
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