National Governance Index, Corruption Index, and Growth Rate-International Evidence from Sub-Saharan and MENA Countries

Author(s)
Al Farooque, Omar
Hamid, Ali
Sun, Lan
Publication Date
2022-06
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.
Citation
Journal of Risk and Financial Management, 15(6), p. 1-19
ISSN
1911-8074
1911-8066
Link
Publisher
MDPI AG
Rights
Attribution 4.0 International
Title
National Governance Index, Corruption Index, and Growth Rate-International Evidence from Sub-Saharan and MENA Countries
Type of document
Journal Article
Entity Type
Publication

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