Inclusive Human Development and Governance Nexus: Causality Analysis of Selected Asian Countries

Tasos Stylianou, Rakia Nasir () and Muhammad Waqas
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Tasos Stylianou: Department of Economics, International Hellenic University, Dimitriou Poliorkitou 65, PC 54633 Thessaloniki, Greece
Rakia Nasir: Department of Economics and Statistics, University of Management and Technology, Lahore 54770, Punjab, Pakistan
Muhammad Waqas: Department of Economics, University of Sargodha, Sargodha 40100, Punjab, Pakistan

Economies, 2023, vol. 11, issue 3, 1-14

Abstract: This study investigates the role of governance in inclusive human development in the case of twenty-four selected Asian countries, using panel data for the time period from 2010 to 2017. The inequality-adjusted human development index, developed by the United Nation Development Program, has been used as a proxy for inclusive human development. In addition, six indicators of governance have been used as independent variables in a regression model, along with three control variables. We have tested the stationarity of our data using panel unit root tests such as Leviv-Lin-Chu and Augmented Dickey Fuller. The Pearson correlation matrix helps us find out the correlation among variables. The findings show a mixed level of correlation among the variables (i.e., high, low, and moderate). Furthermore, our results show that a strong causal relationship among the variables exists. One of the most important findings is that there is bi-directional causality between the inclusive human development index (IHDI) and development expenditure. The IHDI causes more government investment in development projects, whereas more development expenditure in the country achieves a higher IHDI. Trade openness and development expenditure have a bi-directional causal relationship. Finally, economic governance causes political governance in the case of our selected Asian countries.

Keywords: inclusive human development; governance; Asian countries (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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