Validity of Governance-Prosperity: Fresh Evidence Under Homogeneous and Heterogeneous Methods

Shahid Ali, Aamir Azeem, Zhou Xiaohong, Muhammad Akram Naseem and Syed Waqar Haider

SAGE Open, 2024, vol. 14, issue 4, 21582440241297090

Abstract: The purpose of this study is to determine whether governance has an impact on per capita income. The governance-prosperity hypothesis was validated using data from 48 high-income countries. This study examines all governance indicators in sample countries rather than one that addresses specific effects. We find that good governance enhances prosperity, while FDI, exports, and urbanization positively impact effective governance outcomes using homogeneity and heterogeneity panel methodologies. In contrast, household expenditures exhibit a diverse relationship that requires a combination of saving policy and spending to increase per capita income. We found that effective governance attracts foreign direct investment, leading to high exports and urbanization trends. Therefore, countries should strengthen their governance apparatus to reap the benefits of sustainable economic growth.

Keywords: governance; prosperity; per capita income; political stability; corruption control; government effectiveness; law and order; voice and accountability; homogeneous; heterogeneous (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/21582440241297090 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:14:y:2024:i:4:p:21582440241297090

DOI: 10.1177/21582440241297090

Access Statistics for this article

More articles in SAGE Open
Bibliographic data for series maintained by SAGE Publications ().