National Governance Index, Corruption Index and Growth Rate—International Evidence from Sub-Saharan and MENA Countries
Omar Al Farooque,
Ali Hamid and
Lan Sun
Additional contact information
Omar Al Farooque: UNE Business School, University of New England, Armidale, NSW 2351, Australia
Ali Hamid: UNE Business School, University of New England, Armidale, NSW 2351, Australia
Lan Sun: School of Business and Law, Central Queensland University, Sydney, NSW 2000, Australia
JRFM, 2022, vol. 15, issue 6, 1-19
Abstract:
In an international setting of developing countries, applying advanced statistical estimation approaches such as the system generalized method of moments (GMM), two-stage least square (2SLS) regressions, and cluster analysis, this paper revisits the impact of macro-level governance quality and the corruption index on the economic growth rate. We use cross-country panel data for 40 sub-Saharan and the Middle Eastern and North African (MENA) countries over the period of 2009–2020. The empirical results document the positive and negative effects of the national governance index and the corruption index on the economic growth rate. Additionally, foreign direct investment and population have a positive impact on the economic growth rate and trade openness has a negative impact. The study evaluates the robustness of these associations through a series of tests. These findings have important policy implications for policymakers and regulators in developing countries. In particular, the study recommends the implementation of an anti-corruption campaign and improving country-level governance quality that could encourage increased foreign direct investment for an accelerated economic growth rate. These will further enhance accountability, transparency, the rule of law, social responsibility, the public voice, and government effectiveness.
Keywords: national governance index; corruption index; economic growth rate; sub-Saharan Africa and MENA countries; GMM; 2SLS; cluster analysis (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:15:y:2022:i:6:p:261-:d:835132
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