The Analysis on Relationship between Good Governance and Economic Development

Abstract

The improvement of quality of life and welfare of humans and achievement of economic growth and development are some of the major concerns for the countries in the world we are living. The evidences signify that the countries can acquire further achievement, which they have relied on public partnership in formulation of such important strategies and decision-making in this regard and they have prepared the ground for playing role by members of the community as the responsible and aware members. Inter alia, the subject that the public mind has been mainly preoccupied by it is the way of administration of community as well as public welfare since on the one hand, economic development is accompanied further with utilization from welfare, educational, and healthcare facilities and utilities etc by members of the community and it leads to expansion of awareness among the people; and on the other hand, the good government causes benefitting equally from the facilities and opportunities for the people and it makes the leaders and authorities to become responsive versus people and finally to prevent from expansion of economic corruption in the society. The good governance was introduced by means of World Bank model that included 6 parameters of voice and accountability, political stability and lack of violence, government effectiveness, regularity quality, rule of law, and control of corruption in this investigation that consists of independent variable in the present research and economic development comprised of 4 parameters of economic growth rate, inflation rate, GINI Index, and Human Development Index (HDI) out of which 8 leading groups of economic development introduced by Central Bank of Islamic Republic of Iran (CBI) were selected with reference to experts (PhD in economics and specialist), which are assumed as the dependent variable in the current study. The interview and using documents and evidences were employed as 2 tools for collection of statistical data and information regarding governance and development and by the aid of structural equation techniques and using LISREL software and multivariate regression method and SPSS software the results of the research findings also suggest that there is significant relationship among six elements of good governance and four parameters of economic development in Iran during years (1995–2008) in relation to first major hypothesis while regarding the second major hypothesis namely comparison among two governments, it was characterized that the effects of parameter of good governance on economic development index differ from each other in seventh and ninth governments.