Moderating the Effect of the Multidimensional Poverty Index on the Relationship between Sustainable Governance Indicators and Worldwide Governance Indicators

Abraham Puente De La Vega Caceres (), Estela Quispe Ramos and Carlos Samuel Ramos Meza
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Abraham Puente De La Vega Caceres: Faculty of Economic, Administrative and Accounting Sciences, Universidad Andina del Cusco, Cusco 08000, Peru
Estela Quispe Ramos: Faculty of Economic, Administrative and Accounting Sciences, Universidad Andina del Cusco, Cusco 08000, Peru
Carlos Samuel Ramos Meza: Instituto Científico, Universidad Andina del Cusco, Cusco 08000, Peru

Sustainability, 2024, vol. 16, issue 7, 1-24

Abstract: This research comprehensively addresses the complexity of the Multidimensional Poverty Index (MPI). The research objective is to understand the moderating effect of the MPI on the relationship between Sustainable Governance Indicators (SGIs) and World Governance Indicators (WGIs) in the context of 41 countries belonging to the Organization for Economic Cooperation and Development (OECD) while also analyzing the validity and reliability of the indicators. The applied methodology involves using Structural Equation Modeling with Partial Least Squares (SEM-PLS), and data from 41 OECD countries were analyzed. Data on SGIs, WGIs, and the MPI were extracted from the SGI-2022, WGI-2022, and SGI-MPI (2022) databases. Moderating the interaction between the MPI and SGIs reveals a significant overall negative effect (−0.184) on the relationship between SGIs and WGIs (total effect = 0.474); this implies that elevated levels of the MPI negatively impact sustainable governance between SGIs and WGIs, whereas lower levels of the MPI lead to a stronger relationship between SGIs and WGIs, enhancing sustainable governance. The validity of the structural model is affected by low Average Variance Extraction (AVE) in key variables, such as Economic Policy-EP (0.470) and MPI (0.439), indicating potential limitations in their measurement.

Keywords: sustainable governance indicators (SGIs); worldwide governance indicators (WGIs); multidimensional poverty index (MPI); organization for economic cooperation and development (OECD); structural equation modeling (SEM) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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