Poor Quality Of Governance Research Articles

Armed Banditry and Challenges of National Development : Is Nigeria’s Governance System Failing?

The incessant bandits’ activities vis-à-vis kidnapping of people for ransom, robbing them of their possessions, raping and even killing them at will by groups of people officially described as bandits in parts of Nigeria is worrisome. The study examines the nexus between governance and armed bandits’ activities, as well as its effects on the people and national development. The study relies on researchers’ observation of unfolding events in the study areas and secondary data. The study revealed that the poor quality of governance offered by the successive political leaders of Nigeria was the major inducing factor of these bandits’ activities. Other factors include political and economic reasons, a high unemployment rate, and a high level of poverty. The study concluded that bandits’ activities, if not quickly nipped in the bud will continue to inhibit the political, social, and economic development of the country, also, the activities are capable of truncating the evolving democratic governance and the corporate existence of Nigeria.

Латинская Америка: колебания политического маятника Ивановский З.В., ред. Латинская Америка: политический ландшафт на фоне турбулентности. М.: ИЛА РАН, 2022

The left and right, democratic, hybrid, and authoritarian systems, consolidated and unconsolidated democracies, rising giant-states and underdeveloped economies coexist in the region of Latin America and the Caribbean, which covers more than three dozen states that share common historical destiny, language, and religion. This makes the region a fertile ground for studying various types of regimes, political processes and alternative development paths in the modern world, as vividly demonstrated by the collective monograph “Latin America: Political Landscape in the Midst of Turbulence”, published at the end of 2022. Based on a thorough analysis of the situation in the region, the authors of the monograph show that political life in Latin America is characterized by instability and constant reshaping of the political landscape. The strengthening of the positions of right-wing forces replaced the left turn of the 2000s, and since the beginning of the 2020s, the continent has again drifted to the left. The authors pay special attention to the following factors of turbulence in the development of the region: a natural-resource-based economy in most Latin American countries, poor quality of governance, a decline in trust in political institutions caused by regular corruption scandals, the criminalization of society, the increase in drug trafficking and violence, and the inability of law enforcement agencies to ensure citizens’ safety. Several chapters of the monograph are devoted to the varieties of regimes of the “21st century socialism” that exist in Venezuela, Nicaragua and Bolivia, as well as to the oldest socialist regime on the continent in Cuba. According to the reviewer’s conclusion, with the publication of this monograph the readers received valuable work that allows them to better comprehend the essence of the complex political processes that take place in Latin America today.

Does Governance in MENA Countries Attract Migrants' Remittances?

Over the past years, international remittance of migrants to the Middle East and North Africa (MENA) has increased dramatically and become more resilient external financing sources than other capital flows, such as FDI, portfolio investment, and foreign aid. Nevertheless, the magnitude of remittances flowing into that region is less than expected. The research, hence, attempts to analyze the impact of governance on the volume of remittances in receiving economies in MENA from 1996 until 2020 by using the pooled mean group, mean group, and dynamic fixed effect methods. The results show that poor governance in MENA stimulates migrants to remit more to support and assist their relatives with their deplorable living conditions. Consequently, policymakers in the MENA region must strive to identify the underlying causes of weak governance and provide applicable solutions, as migrants' remittances cannot entirely eradicate the damage caused by the poor quality of governance. They also should provide an attractive environment for international remittances by applying policies pushing migrants to remit more, such as accelerating administrative procedures for business and increasing the interest rate on foreign currency deposits.

Is social spending pro‐poor in developing countries? The role of governance and political freedom

AbstractThis article extends the existing literature on the social spending‐poverty nexus by testing the proposition that the quality of governance and the political freedom status determine social spending effectiveness in developing countries (DCs). Our analysis helps explain the surprising result documented in prior studies, of no clear evidence that higher social spending, especially on education and health, translates to a significant reduction in poverty in DCs. Using unbalanced panel data of a large sample of DCs covering the period 1980–2019, we demonstrated that the impact of public spending on poverty is significantly reduced in countries that have a poor quality of governance and in those with relatively few political freedoms. This result is robust to a change in the poverty indicator and type, and the estimator used in regression models. This finding implies that improving the efficacy of social spending through improving governance and political freedom is as crucial as increasing the scale of this spending in the poverty alleviation strategy of DCs, especially those with limited public resources. Our empirical analysis also revealed other novel results about the socioeconomic factors most likely to explain poverty in DCs.

Product market threats and leverage adjustments

This research examines the effect of product market threats on firms’ leverage adjustments. We find that competitive pressures from the product market accelerate the leverage speed of adjustment (SOA) toward the target capital structure. To establish the causal effect of competitive threats on SOA, we exploit a quasi-natural experiment provided by large import tariff reductions in the U.S. manufacturing sector and show a significant increase in firms’ leverage adjustments after large tariff cuts. The impact of product market threats on leverage adjustments is more pronounced for firms with poor governance quality and exposed to product market threats. Finally, to the extent that reaching the target capital structure enhances firm value, we note that the faster SOA following competition translates into higher firm value. Overall, our study highlights the “bright side” of product market competition and suggests that agency conflicts between managers and shareholders are attenuated by intensified competition.

Countries’ governance and competitiveness: business environment mediating effect

Purpose The purpose of this study is to analyze how institutional governance and business environment affect countries’ competitiveness and their relative importance. Design/methodology/approach In this paper, the authors analyze how institutional governance and business environment affect countries’ competitiveness, their relative importance and what are the implications for Brazil. The authors have collected data from 131 countries related to the institutional governance, business environment and competitiveness of these countries. For the analysis of the mentioned influences, the technique of partial least squares structural equations modeling is used. Findings Results indicate that the main role in countries’ competitiveness is played by the quality of institutional governance. The quality of the business environment reinforces the positive effect of the quality of institutional governance on countries’ competitiveness (mediation effect). Brazil has poor governance quality indicators when compared to high-middle income countries, especially regarding government effectiveness, political stability and control of corruption. Research limitations/implications The study provides a better understanding of the relative importance of governance quality and business environment quality for countries’ competitiveness. One limitation of this study is that the research was restricted to data related to the year 2019. Practical implications For strategists and decision-makers, understanding these effects on countries’ competitiveness and their relative importance is fundamental to understanding what makes their companies internationally competitive. Social implications The presence and appreciation of institutional governance quality need to be cultivated in society. Originality/value Instead of using the original diamond model, which presents circular relationships, the authors have used the business environment construct, composed of elements of the diamond model to test the relationships between the quality of institutional governance, competitiveness and the business environment.

Governance, Financial Development and Economic Growth in the WAEMU area: Evidence from panel ARDL analysis

The objective of this work is to estimate the long-term effects of governance quality on financial development and the real sector growth in WAEMU zone covering the period of 1996 to 2018. To this end, we utilize the Pooled Mean Group (PMG) method to estimate a nonlinear panel through the ADRL model proposed by Pesaran et al., (1999) and Pesaran and Smith, (1995). The results show that the quality of certain governance factors determines the financial system and its capacity to accelerate growth in long run. The study demonstrates that the marginal effect of financial development on growth is about 0.69 point for a given threshold of governance quality. This outcome means that financial development affects positively growth and the governance level sustains that positive effect despite the poor quality of governance comprises between -1 and 1. Therefore, an improvement of governance quality will provide a favourable environment for financial development and consequently for economic growth. The study finally calls policy maker to more strengthen democracy and rule of law, this could offer more guarantees to banks for granting long-term credits. JEL classification numbers: C23, E44, G21. Keywords: Growth, Financial development, PMG, MG, WAEMU.

Https://econjournals.com/index.php/ijeep/article/view/11259

The objective of this paper is to empirically examine whether energy consumption and governance quality affect sustainable development in 17 Middle East and North Africa (MENA) countries over the period 1984-2018 using a simultaneous equation model (SEM). Empirical results provide evidence that control of corruption and the institutional or governance quality of are complementary and essential for energy consumption to have an indirect positive impact on sustainable development. The results also show that sustainable development reacts negatively to energy consumption because the poor governance quality in MENA countries. These empirical insights are of particular interest to policymakers to improve the governance quality and implement sound economic policies to support economic development. Keywords: governance quality, energy consumption, economic growth, simultaneous equation model JEL Classifications: H11, Q01, Q43, C30 DOI: https://doi.org/10.32479/ijeep.11259

The effect of regulation‐driven trade barriers and governance quality on export entrepreneurship

AbstractThis paper examines the impact of regulation‐driven trade barriers on export entrepreneurship in a panel of 60 countries between 2006 and 2014. The paper finds robust evidence that unfavorable trade regulations significantly reduce export entry rate and export entry density (two critical measures of export entrepreneurship) by increasing the time and cost associated with documentary and customs compliance procedures. These findings support the hypothesis that less conducive business regulations are an important domestic supply constraint which impedes export entrepreneurship by increasing trade costs. In addition, the paper finds that the magnitude of the negative relationship between export entrepreneurship and regulation‐driven trade barriers is significantly more pronounced in countries with poor governance quality. Two measures of governance quality (i.e., political stability and rule of law) are shown to be relatively more significant in aiding favorable trade regulations that promote export entrepreneurship. Furthermore, a reduction in regulation‐driven trade barriers has a positive impact on net entry rate and survival rates of first‐, second‐ and third‐year exporters, and high‐quality governance institutions significantly increase the magnitude of this positive relationship.

"НЕДОСТОЙНОЕ ПРАВЛЕНИЕ" В УСЛОВИЯХ ВНЕШНЕГО ШОКА: СЛУЧАЙ ПАНДЕМИИ COVID-19

Although COVID-19 pandemic is far from its ending, and it is too early to draw even tentative conclusions regarding its effects, judging by excessive mortality of Russian citizens, one may argue that Russia responded to pandemic much worse than most of developed countries - by the end of 2021, the number of victims exceeded 1 million persons. This outcome resulted from numerous factors, including insufficient funding of public health and ineffectiveness of health policy in Russia during the entire post-Soviet period. However, pernicious effects of bad governance - a politico-economic order, which is aimed at rent-seeking as the major goal of governing Russia - played a major role in devastating outcomes of pandemic. Bad governance contributed to a poor quality of governance in Russia, according to evaluations of several international agencies. It emerged and consolidated in Russia in the early twenty-first century due to many actions of political leadership. Against this background, the pandemic became an exogenous shock, which aggravated numerous previous vices of bad governance in Russia. The article is focused on the impact of mechanisms of governing the Russian state, their incentives for various actors, and effects of political and policy decisions of Russian authorities from the viewpoint of consequences of pandemic for Russia and its citizens.

Foreign aid, institutional quality and government fiscal behavior in emerging economies: An empirical investigation

Following the aid disbursements, if the total government spending increases less than the total amount of foreign aid in the recipient developing economies, foreign aid is presumed to be fungible. In this case, aid becomes substitute for the domestic government spending rather than supplement and fails to fully achieve the provision of goods and services intended by the donors. This paper examines the link between foreign aid and government spending in the presence of fungibility and how the quality of governance and institutions affects the degree of aid fungibility. Our results show that fungibility is still an existing problem for the aid recipient economies with higher governance quality but the degree of fungibility (substitution away from the domestic government spending in response to aid inflows) is lower (foreign aid crowds out government spending less) in those countries. We find that government spending is more responsive to increases in foreign aid (i) in the presence of is political stability and free media, (ii) while corruption is reduced, contracts are enforced, property rights are protected and (iii) when the government has a higher regulatory power in implementing sound policies. These results suggest that poor governance quality might be one of the neglected measures in aid’s (in)effectiveness riddle.

Behaviors of Transformational Leadership in Promoting Good Governance at the Palestinian Public Sector

Good governance is considered one of the significant requirements for development and competency in the public-sector organisations. However, according to the Worldwide Governance Report, the state of Palestine has been experiencing a poor quality of governance. The motivation behind this study is to seek a more in-depth understanding of determining the role of transformational leadership in promoting the principles of good governance in the Palestinian public sector. This study employed total population sampling with data collected from 342 general managers in the government sector in Gaza strip. Partial least square of structural equation modelling was used for data analyses. Findings of the study revealed a positive and significant relationship between all transformational leadership behaviours and good governance except for inspirational motivation. Also, the findings confirmed that governments, by practising transformational leadership, that, in turn, results in promoting good governance. The current study has contributed to literature by introducing new empirical evidence in organisational studies of the role of transformational leadership behaviours in improving good governance especially in developing countries such as Palestine. Therefore, this study suggests that it is advisable for public organisations to invest in transformational leadership training and encourage all behaviors to improve the level of good governance.

Evaluating Good Governance in Preserved Forests: a Comparison Between Community-based and State-based Forest Management in South Sumatera

In Indonesia, the existence of preserved forest is threatened by the high rate of deforestation associated with poor quality of governance. This study aims to evaluate the applying of good governance principles in preserved forest at South Sumatera and its effect on deforestation. This study is a qualitative research. Good governance principles refer to Lockwood (2009) which consists of seven principles. This study reveals that SBFM is better than CBFM in applying good governance principles by earning the higher appraisal results compared to CBFM for all principles. Furthermore, applying good governance principles did not lead directly to lower deforestation rate.

Politics versus Policy: Technocratic Traps of Russia’s Policy Reforms

A number of policy reforms in post-Soviet Russia have been conducted within the framework of the technocratic model. Policy proposals have been developed and to some extent implemented by certain teams of professionals appointed by legitimate political leaders. The leaders, in turn, have tended to monopolize policy adoption and evaluation and to insulate the substance of reforms from public opinion. This article is devoted to a critical reassessment of the technocratic model of policy-making in the context of changes of the 1990s–2010s. The main focus of the analysis is on the political and institutional constraints of policy-making resulting from the influence of interest groups and mechanisms of governance within the state apparatus. Poor quality of governance and rent-seeking aspirations of major actors create significant barriers for reforms, while insulation of policy-making, although beneficial for technocratic reformers themselves, has resulted in an increase to the social costs of reforms and distorted their substantive outcomes. In the conclusion, possible alternatives to the technocratic model are discussed.

Do commodity price shocks weaken the financial sector?

AbstractThis paper investigates the impact of commodity price shocks on financial sector fragility. Using a large sample of 71 commodity exporters among emerging and developing economies, it shows that negative shocks to commodity prices tend to weaken the financial sector, with larger shocks having more pronounced impacts. More specifically, negative commodity price shocks are associated with higher non‐performing loans, bank costs and banking crises, while they reduce bank profits, liquidity and provisions to non‐performing loans. These adverse effects tend to occur in countries with poor quality of governance, weak fiscal space, as well as those that do not have a sovereign wealth fund, do not implement macroprudential policies and do not have a diversified export base. These findings are robust to a battery of robustness checks.

The Effects of Natural Resources on Urbanization, Concentration, and Living Standards in Africa

Summary This paper examines the effects of natural resource abundance on urbanization and living standards in Africa. Our central hypothesis is that the exploitation of natural resources in a context of poor governance quality creates the conditions for rapid urbanization and urban concentration, and ultimately lowers living standards in primal cities. Using a large panel of African countries, our results show that an increase in the share of natural resources leads to a rapid increase in urbanization and urban concentration, even after taking into account endogeneity issues, or after using more exogenous measures of resource dependency. The paper also establishes a negative association between the resource abundance, the quality of life in large cities and the degree of informality via the increase in urbanization rate and urban concentration. Importantly, we have established that these results mostly hold in the context of bad governance. More specifically, the resource-led urbanization and concentration booms take place mainly in countries characterized by poor governance records. Furthermore, poor governance quality is associated with a more detrimental effect of urbanization and urban concentration on the quality of life in African cities. These results suggest that ongoing transformations experienced by these countries call for complementary policies to ensure a more balanced and efficient urbanization process.

Financial Development and Income Inequality: Long-Run Relationship and Short-Run Heterogeneity

This article examines the dynamic relationship between financial development and income inequality using the PMG. We find that financial development will reduce inequality in the long run, while it can increase inequality in the short run. Using the estimates of country-specific short-run coefficients, we also find that adverse short-run effects of financial development are associated with the vulnerabilities of countries in terms of their greater susceptibility to crises and poor quality of governance. Good governance seems to be important for achieving inclusive growth though financial development.

Commodity Price Shocks and Financial Sector Fragility

This paper investigates the impact of commodity price shocks on financial sector fragility. Using a large sample of 71 commodity exporters among emerging and developing economies, it shows that negative shocks to commodity prices tend to weaken the financial sector, with larger shocks having more pronounced impacts. More specifically, negative commodity price shocks are associated with higher non-performing loans, bank costs and banking crises, while they reduce bank profits, liquidity, and provisions to nonperforming loans. These adverse effects tend to occur in countries with poor quality of governance, weak fiscal space, as well as those that do not have a sovereign wealth fund, do not implement macro-prudential policies and do not have a diversified export base. These findings are robust to a battery of robustness checks.

Commodity Price Shocks and Financial Sector Fragility

This paper investigates the impact of commodity price shocks on financial sector fragility. Using a large sample of 71 commodity exporters among emerging and developing economies, it shows that negative shocks to commodity prices tend to weaken the financial sector, with larger shocks having more pronounced impacts. More specifically, negative commodity price shocks are associated with higher non-performing loans, bank costs and banking crises, while they reduce bank profits, liquidity, and provisions to nonperforming loans. These adverse effects tend to occur in countries with poor quality of governance, weak fiscal space, as well as those that do not have a sovereign wealth fund, do not implement macro-prudential policies and do not have a diversified export base. These findings are robust to a battery of robustness checks.

Quality of governance, public spending on health and health status in Sub Saharan Africa: a panel data regression analysis.

BackgroundThe population in Sub Saharan Africa (SSA) suffers poor health as manifested in high mortality rates and low life expectancy. Economic growth has consistently been shown to be a major determinant of health outcomes. However, even with good economic growth rates, it is not possible to achieve desired improvements in health outcomes. Public spending on health (PSH) has long been viewed as a potential complement to economic growth in improving health. However, the relationship between PSH and health outcomes is inconclusive and this inconclusiveness may, in part, be explained by governance-related factors which mediate the impact of the former on the latter. Little empirical work has been done in this regard on SSA. This paper investigates whether or not the quality of governance (QoG) has a modifying effect on the impact of public health spending on health outcomes, measured by under-five mortality (U5M) and life expectancy at birth (LE), in SSA.MethodsUsing two staged least squares regression technique on panel data from 43 countries in SSA over the period 1996–2011, we estimated the effect of public spending on health and quality of governance U5M and LE, controlling for GDP per capita and other socio-economic factors. We also interacted PSH and QoG to find out if the latter has a modifying effect on the former’s impact on U5M and LE.ResultsPublic spending on health has a statistically significant impact in improving health outcomes. Its direct elasticity with respect to under-five mortality is between −0.09 and −0.11 while its semi-elasticity with respect to life expectancy is between 0.35 and 0.60. Allowing for indirect effect of PSH spending via interaction with quality of governance, we find that an improvement in QoG enhances the overall impact of PSH. In countries with higher quality of governance, the overall elasticity of PSH with respect to under-five mortality is between −0.17 and −0.19 while in countries with lower quality of governance, it is about −0.09. The corresponding semi elasticities with respect to life expectancy are about 6 in countries with higher QoG and about 3 in countries with lower QoG.DiscussionPublic spending on health improves health outcomes. Its impact is mediated by quality of governance, having the higher impact on health outcomes in countries with higher quality of governance and lower impact in countries with lower quality of governance. This may be due to increased efficiency in the use of available resources and better allocation of the same as QoG improves.ConclusionImproving QoG would improve health outcomes in SSA. The same increase in PSH is twice as effective in reducing U5M and increasing LE in countries with good QoG when compared with countries with poor QoG.