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1 – 10 of over 70000Musibau Adetunji Babatunde and Joshua Adeyemi Afolabi
The growing volume of trade misinvoicing in Sub-Saharan Africa (SSA) calls for serious concern, particularly given its effect on macroeconomic fundamentals. Despite the growing…
Abstract
Purpose
The growing volume of trade misinvoicing in Sub-Saharan Africa (SSA) calls for serious concern, particularly given its effect on macroeconomic fundamentals. Despite the growing body of literature on the growth effect of trade misinvoicing, empirical evidence on the role of governance in moderating the effect is quite scarce, particularly for SSA. The purpose of this paper is to provide insights into the growth effect of trade misinvoicing in SSA as well as the moderating role of governance in this regard.
Design/methodology/approach
The feasible generalised least square estimator was applied to analyse relevant data, spanning 2009–2018, of 35 SSA countries. Governance indicators were classified into economic, political and institutional governance, and their individual role in moderating the nexus between trade misinvoicing and economic growth was explored.
Findings
This paper showed the presence of cross-sectional dependence among SSA countries and long-run convergence of the estimated variables. The empirical finding showed that trade misinvoicing has a negative growth effect in the selected SSA countries, but both economic and political governance are crucial in lowering the observed negative growth effect.
Practical implications
To curtail trade misinvoicing, SSA policymakers should go beyond just designing anti-money laundering policies to effectively implementing the policies for improved growth prospects. More so, the government of each SSA country must devise means of strengthening governance and building effective, accountable and transparent institutional frameworks that will constantly check and discourage trade misinvoicing activities.
Originality/value
The originality of this paper stems from its novel assessment of the role governance plays in moderating the growth effect of trade misinvoicing in SSA using the feasible generalised least square estimator. It also details the strategies needed to effectively tackle trade misinvoicing.
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Kamil Omoteso and Hakeem Ishola Mobolaji
This study aims to investigate the impact of governance indices (especially control of corruption) on economic growth in some selected Sub-Sahara African (SSA) countries with a…
Abstract
Purpose
This study aims to investigate the impact of governance indices (especially control of corruption) on economic growth in some selected Sub-Sahara African (SSA) countries with a view to making policy recommendations. Specifically, the study attempts to assess whether either governance reforms (especially those relating to control of corruption) or simultaneous policy reforms could have any impact on the growth of the sample SSA countries.
Design/methodology/approach
The governance indicators used in this study were drawn from the PRS Group and the Worldwide Governance Indicators for 2002-2009, while the real gross domestic product (GDP) per capita growth data were obtained from the World Bank database. The study covered 47 SSA countries, and it adopted the panel data framework, the fixed effect, the random effect and the maximum likelihood estimation techniques for the analyses.
Findings
The study found that political stability and regulatory quality indicators have growth-enhancing features, as they impact on economic growth in the region significantly, while government effectiveness impacts negatively on economic growth in the region. Despite, several anti-corruption policies in the region, the impact of corruption control on economic growth is not very obvious. The study also found that simultaneous implementation of the voice and accountability and the rule of law indicators has more positive impact on economic growth in the region. Both policies are complementary, and, hence, can be pursued simultaneously.
Research limitations/implications
The results suggest that reform efforts that aim at enhancing accountability, regulatory quality, political stability and the rule of law have more growth-enhancing features and, thus, should be given more priority over reform efforts that singly address the issue of control of corruption due to the endemic, systemic and ubiquitous nature of corruption in the region.
Practical implications
The study suggests that reform efforts that aim at enhancing accountability, regulatory quality and rule of law have more growth-enhancing features and, therefore, should be given more priority.
Originality/value
Many previous studies attempted to examine the impact of corruption on economies, but this paper tries to assess the effect of corruption control and other governance indices on economic growth in the most vulnerable region of the world, the SSA. Besides, the study adopts the panel data framework which makes it possible to allow for differences in the form of unobservable individual country effects.
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Cheche Duan, Yicheng Zhou, Yuanqing Cai, Wei Gong, Chunzhen Zhao and Jian Ai
This paper investigates the relationship between human capital, economic freedom, governance performance, and economic growth and whether institutional factors such as governance…
Abstract
Purpose
This paper investigates the relationship between human capital, economic freedom, governance performance, and economic growth and whether institutional factors such as governance performance and economic freedom mediate the association between human capital and economic growth.
Design/methodology/approach
In this study, the authors apply the panel data regression method to verify five hypotheses and check the robustness of the empirical findings from four aspects (chow test, panel unit root test, granger test and generalized method of moments) based on the data covering China, India, Russia, Brazil and South Africa from 2000 to 2018.
Findings
After multiple tests with mixed methods, the empirical results show that the relationship between human capital and economic growth is not linear but inverted U-shaped. Furthermore, human capital has a positive effect on economic growth only in a certain period of time, and governance performance positively moderates the effect of human capital on economic growth in BRICS.
Originality/value
First, the impact of human capital on economic growth is not linear but an inverted U-shaped and governance performance moderates the effect of human capital on economic growth in BRICS. The study and research model enhances the authors’ insights on the advantage and challenges of human capital in the future. Second, the proposed multi-methods in the study accurately forecast economic growth which partially solves endogenous problems because of reverse causality.
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Chara Vavoura, Dimitris Manolopoulos and Ioannis Vavouras
In this chapter, we investigate the interactions between governance quality and economic development. More specifically, we analyze how the institutions through which state…
Abstract
In this chapter, we investigate the interactions between governance quality and economic development. More specifically, we analyze how the institutions through which state authority is exercised influence the level of economic development. In that respect, governance could be considered as a quasi-factor of production which affects the country's economic growth and development, an issue that lies in the heart of institutional economics. The effect of governance on economic development is mainly played out via two channels. Namely, the quality of democracy, distinguished in political rights and civil liberties, and the level of corruption, associated with the exercise of state authority. Good governance is in principle associated with a high quality of democracy and a low level of corruption. Both generate positive effects on the level of economic growth and development, mainly due to their impact on state effectiveness and private and public investment. At the same time, there also exists an inverse causality: the level of economic development affects positively the quality of democracy and negatively the level of corruption which in turn tend to improve the quality of democracy. These coexistent mechanisms are associated with crucial policy issues which are largely neglected by the traditional theory of economic growth.
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Refining and updating Harvey’s theorisation of the shift from managerialism to entrepreneurialism, this chapter charts the changing business of entrepreneurial governance through…
Abstract
Purpose
Refining and updating Harvey’s theorisation of the shift from managerialism to entrepreneurialism, this chapter charts the changing business of entrepreneurial governance through an examination of English economic development practice. Local Enterprise Partnerships (LEPs), sub-national entrepreneurial governance entities, provide the empirical lens to understand the contemporary role of private interests in the pursuit of public goals in securing innovative approaches to economic development.
Methodology/approach
Comparative analysis of the strategic priorities, ways of working and interventions of LEPs operating across Greater Birmingham and the North East of England is undertaken against the backdrop of a competitive environment where the mantra is ‘the market knows best’.
Findings
The key finding is that while some policy outcomes are prosaic, albeit across contextually distinct entrepreneurial governance places, more innovative policy approaches are emerging.
Practical implications
The chapter shows that there remains value in business involvement in urban governance in its present mode. A more permissive, entrepreneurial mode of governance with the liberation of private enterprise may be leading to imaginative as well as boosterist ways of securing sustainable growth.
Originality/value of the chapter
The chapter suggests some options for policy-makers and a series of challenges for decision-makers.
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Simplice Asongu and Joseph Nnanna
This study aims to assess the role of income levels (low and middle) in modulating governance (political and economic) to influence inclusive human development.
Abstract
Purpose
This study aims to assess the role of income levels (low and middle) in modulating governance (political and economic) to influence inclusive human development.
Design/methodology/approach
The empirical evidence is based on interactive quantile regressions and 49 countries in sub-Saharan Africa for the period 2000-2002.
Findings
The following main findings are established. Firstly, low income modulates governance (economic and political) to positively affect inclusive human development exclusively in countries with above-median levels of inclusive human development. It follows that countries with averagely higher levels of inclusive human development are more likely to benefit from the relevance of income levels in influencing governance for inclusive development. Secondly, the importance of middle income in modulating political governance to positively affect inclusive human development is apparent exclusively in the median while the relevance of middle income in moderating economic governance to positively influence inclusive human development is significantly apparent in the 10th and 75th quantiles. Thirdly, regardless of panels, income levels modulate economic governance to affect inclusive human development at a higher magnitude, compared to political governance. Policy implications are discussed in light of the post-2015 agenda of sustainable development goals and contemporary development paradigms.
Originality/value
This study complements the extant sparse literature on inclusive human development in Africa.
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Simplice A. Asongu, Uchenna Efobi and Vanessa S. Tchamyou
This study aims to assess the effect of globalisation on governance in 51 African countries for the period 1996-2011.
Abstract
Purpose
This study aims to assess the effect of globalisation on governance in 51 African countries for the period 1996-2011.
Design/methodology/approach
Ten bundled and unbundled governance indicators and four globalisation variables are used. The empirical evidence is based on Generalised Method of Moments.
Findings
Firstly, on political governance, while only social globalisation improves political stability, only economic globalisation does not increase voice and accountability and political governance. Secondly, with regard to economic governance: only economic globalisation significantly promotes regulation quality; social globalisation and general globalisation significantly advance government effectiveness; and economic globalisation and general globalisation significantly promote economic governance. Thirdly, with respect to institutional governance, while only social globalisation improves corruption-control, the effects of globalisation dynamics on the rule of law and institutional governance are not significant. Fourthly, the impacts of social globalisation and general globalisation are positive on general governance.
Practical implications
It follows that political governance is driven by voice and accountability compared to political stability; economic governance is promoted by both regulation quality and government effectiveness from specific globalisation angles; and globalisation does not improve institutional governance for the most part.
Originality/value
Governance variables are bundled and unbundled to reflect evolving conceptions and definitions of governance. Theoretical contributions and policy implications are discussed.
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This paper investigates the impact of governance on economic growth, considering the spatial dependence between countries.
Abstract
Purpose
This paper investigates the impact of governance on economic growth, considering the spatial dependence between countries.
Design/methodology/approach
The study employs spatial regression models to estimate the impact of governance on economic growth in a sample of 116 countries worldwide in 2017.
Findings
The findings imply that the influence of governance on economic growth is statistically significant. Moreover, if all other economic control variables are constant, 1% increase in governance raises the economic growth on average by 1% at 10%, 5% and 1% significance levels, respectively. Furthermore, each country's rise in economic growth favorably and substantially influences the economic growth of its bordering nations. The unobserved characteristics or similar unobserved environments in adjacent countries also affect its economic growth.
Originality/value
This study adds to the discussion and investigation of the influence of governance on economic growth by considering the spatial dependence between countries, which is lacking in the literature.
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Lino Pascal Briguglio, Melchior Vella and Stefano Moncada
The purpose of this paper is to examine whether good governance across countries, utilising the Rule of Law indicator of the Worldwide Governance Indicators, is associated with…
Abstract
Purpose
The purpose of this paper is to examine whether good governance across countries, utilising the Rule of Law indicator of the Worldwide Governance Indicators, is associated with economic growth, measured in terms of real GDP. It is to be noted that in this paper both variables are measured in terms of changes, comparing like with like. It is hypothesised that a country with a high level of economic development and a high level of good governance (typically an economically advanced country) tends to find it more difficult to improve these two variables, when compared to a country with lower levels GDP per capita and good governance (typically an economically backward country). This assumption is termed the “diminishing marginal governance effect”.
Design/methodology/approach
The paper tests the hypothesis that governance improvements are related to real GDP growth, using the panel data regression approach. In this way both variables are measured in terms of changes, comparing like with like. Relevant control variables are utilised to impose the ceteris paribus condition.
Findings
The paper finds that improvements in good governance are statistically and significantly related to economic growth. This confirms the hypothesised “diminishing marginal governance effect” explained above.
Research limitations/implications
The main research limitation of this paper is that measuring changes in the “Rule of Law” indicator over time may be subject to errors given that the “Rule of Law” score of each year is an average value with related standard deviations, and the latter vary from one year to another and from one country to another.
Practical implications
The major practical implication of this paper is that good governance matters for economic growth and that in order to produce evidence for this the governance score must be measured in terms of changes and not in terms of levels. Another implication is that equations that compare economic growth with levels of governance are misspecified as they would not be comparing like with like.
Social implications
There are various beneficial social implications associated with good governance which is considered as a major pillar for orderly social relationships. Economic growth also has important social implications as it means, if properly distributed, improvements in material well-being of the population.
Originality/value
The originality of this paper is that it measures governance in terms of changes and not of levels. Studies on the relationship between governance and economic growth that measure governance in terms of levels generally do not find a positive relationship between the two variables. In using changes in both governance and real GDP, this paper confirms the “diminishing marginal effect of governance”, hypothesis.
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Ida Bagus Putu Purbadharmaja, Maryunani, Candra Fajri Ananda and Dwi Budi Santoso
The purpose of this study is to investigate the relationship between government and Balinese society in tax decentralization through budgeting seem to insignificantly improve the…
Abstract
Purpose
The purpose of this study is to investigate the relationship between government and Balinese society in tax decentralization through budgeting seem to insignificantly improve the welfare of Balinese society.
Design methodology/approach
This research was conducted in Bali Province involving eight regencies and one city. The data used in this study were secondary data, derived from relevant institutions or from websites through internet browsing and other documentations in the form of official reports/publications, such as regional budget, accountability reports, regional regulations and documents on budget and development of the regional economy. The present research used the partial least squares analysis technique.
Findings
Fiscal decentralization does not necessarily lead to better budget management. The success of fiscal decentralization can be found in the quality of the regional budget and the quality of budget management. The allocation of the regional budget for public service improvement and the development of infrastructure will increase the economic capacity of the regions. Improvement in regional economic capacity encourages the improvement of community welfare.
Originality/value
This income inequality points to the issue of fiscal capacity. The development of the financial role of district/city regions in the Province of Bali remains at a level gap with the development level of community welfare. During this period, the financial role of the government as estimated from the ratio of the national budget to the regional budget is higher than that of the society development. The acceleration role of the government is not proportional to the development of Human Development Index outcomes.
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