Abstract
Government interventions and economic activities could have significant impacts on the economies of countries. Effective governance and quality institutions are required for sustainable economic growth in both developed and developing countries. The primary objective of this study was to analyse the impact of government activities on economic growth in Poland. The study followed a quantitative research approach, employing time series data from 1995 to 2017 including GDP as the dependent variable with variables such as government spending and debt, size and effectiveness of government, and the level of corruption as independent variables. The relationships between the variables were analysed by making use of an Auto Regressive Distributed Lag (ARDL) econometric model. The results indicated that there are both long- and short-run relationships between the variables. Other results indicated that government variables included in the study, caused changes in economic growth as assessed via a Granger causality analysis. A number of recommendations were listed which include inter alia, that effective government spending and management have a positive impact on the economy, while efforts to limit the levels of corruption also contributes to economic improvements in a country.
Highlights
On a global scale, governance and governments, and this includes politics, have a significant impact on most economies
This paper has the specific objective to analyse the relationships between government activities and governance issues and economic growth measured as gross domestic product (GDP)
Effective and good governance have been used as interchangeable concepts and this relationship has been used to assist in explaining both concepts (Andrews, 2008)
Summary
Governance and governments, and this includes politics, have a significant impact on most economies. Stabile governance and politics may have a positive impact on the macro-economic environment. Ineffective governance and public institutions play critical roles in poor economic growth and development performance (World Bank, 2000). Good governance appears to be at the centre of growth and development. Effective government activities, including economic activities, is only possible through good governance and quality institutions (Grindle, 2007; Sambumbu & Okanga, 2016). Effective and good governance have been used as interchangeable concepts and this relationship has been used to assist in explaining both concepts (Andrews, 2008).
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