Quality Of Government Institutions Research Articles

Trade openness, governance quality, and economic growth in Latin America and the Caribbean

The existing literature on the relationship between trade openness and economic growth is extensive, but there is a dearth of research that examines whether this relationship is contingent on the quality of governance institutions in a country. In this study, we address this gap by investigating the moderating effects of governance quality on the trade openness-economic growth nexus in Latin America and the Caribbean (LAC) during the 2000–2021 period. We utilize six indicators of governance quality from the World Bank's world governance indicators and employ correlation and the dynamic panel System Generalized Method of Moments technique for robust and efficient analysis, which yields more accurate results when the number of cross-sections exceeds the time dimension of the dataset. Our findings indicate that governance effectiveness, rule of law, control of corruption, and regulatory quality have a significantly positive impact on the positive relationship between trade openness and economic growth. In contrast, the moderating effects of voice and accountability and political stability on the trade openness-economic growth relationship are negative and statistically significant. Based on these results, we conclude that each governance dimension has distinct effects on the trade openness-economic growth nexus. In term of policy recommendation, policymakers need to harness the benefits of international trade for promoting economic growth; therefore, LAC countries should focus on investing in institutional quality and designing policies that would enhance the overall quality and effectiveness of governance.

How do institutions affect output recovery after financial crises?

This study examines whether a country’s institutional quality can affect its output recovery after the recessions caused by financial crises. Utilizing a sample of 66 countries that experienced various financial crises during the period 1985–2010, we find that the quality of government institutions is negatively associated with the duration of recovery as well as the depth and severity of output losses during recessions. The results remained valid even after accounting for potential endogeneity. Moreover, institutional quality’s ability to improve output recovery is more pronounced for countries with the largest output losses, when coupled with an expansionary monetary policy, in emerging economies, during banking and sovereign debt crises, and in the 1990s.

Effect of Internal Audit on Financial Reporting Quality of Selected Government Institution in Rwanda.

The general objective of this research was to examine the effect of internal audit on financial reporting quality of government institutions in Rwanda. with specific objectives, are to describe the implications of auditor’s independence on financial reporting quality of government institution in Rwanda. To determine the effect of Auditor’s experience on financial reporting quality of government institution in Rwanda. To assess the effect of Management support to auditor on financial reporting quality of government institution in Rwanda. To examine the significance qualifications of auditor on financial reporting quality of government institution in Rwanda. Hence The populations of a nation are eligible to assurances of on how administration of institution use country’s economic resources in according the law and regulation of country. The study utilized a descriptive and explanatory research design for cost-effectiveness and flexibility. Primary data was collected through closed-ended questionnaires featuring a 5-point Likert scale. researcher used descriptive statistic, and inferential statistic, regression analysis for the purpose of this study. based on the result of finding in this study, the adjusted R squared value was 0.864, demonstrating that 86.4% of the changes in financial report quality could be explained by the study variable which are Auditor’s Independence, Auditor’s Experience, Management Support and Auditor qualification. On the other hand, the result of hypotheses tested revealed that by mean of the regression analysis results indicate that the standardized coefficient (Beta) value for audit independence (AI) is 0.844, suggesting a minor influence on financial reporting quality. Despite this, the influence is not statistically significant. The results revealed a standardized coefficient (Beta) value of 1.206 for audit experience (AE), indicating a positive effect on financial reporting quality. However, this effect was not found to be statistically significant. The results of the regression analysis indicate that the standardized coefficient (Beta) value for management support is 0.244, suggesting a positive influence on financial reporting quality, but not statistically significant. The regression analysis results indicate that the standardized coefficient (Beta) value for Auditor’s qualification (AO) is 0.892, suggesting a positive effect on financial reporting quality. However, this effect is not statistically significant. based on result the research concludes that internal auditors improve the quality of financial reports of government institutions in Rwanda. and recommends that organization must ensure auditor independence, prioritize recruitment and retention of qualified and experienced Auditor and maintain effective communication with their auditors.

Public perceptions of governance and tax evasion: insights from developed and developing economies

Purpose This paper aims to explore how the role of the perception of good public governance reduces tax evasion (TE). Besides, this study investigates whether the nexus of public governance and TE differs between developed and developing economies. Design/methodology/approach Apart from the ordinary least squares (OLS) model, this study uses the linear mixed modeling technique. The World Governance Indicators and the multiple causes estimation (MIMIC) method are used to measure public governance. The shadow economy is used as a proxy for TE. Findings The results show that people's perceptions of public governance and the quality of government institutions are core elements that influence tax-evasion behavior. Besides, the rule of law (RoL) and political stability (PS) significantly impact tax-evasion behavior in developing countries. Nevertheless, the RoL, the control of corruption and PS are the most critical tax-evasion determinants among public governance indicators for developed countries. Regulatory quality shows a substantial positive relationship with TE in developed but not developing countries. Practical implications This paper provides a guide for policymakers on reducing tax-evasion behavior by paying more attention to maintaining the RoL and PS and fighting corruption. Additionally, this study highlights the importance of people's perceptions of the government's pursuit of the above policy-related improvements, which, in turn, affect their tax behavior. Originality/value To the best of the authors’ knowledge, this study is the first to explore the role of people's perceptions of improvements in public governance and how this can reduce TE behavior in developed and developing economies. Unlike prior studies, this study used the linear mixed model method, which is more advantageous than OLS and produces robust estimators.

ECONOMIC GLOBALIZATION AND UNEMPLOYMENT: THE EXPERIENCE OF ARAB COUNTRIES

The present study seeks to examine the impact of international trade policies on unemployment for 10 Arab countries over the period of 1991 to 2014. In addition to various trade policies measurements, the present study takes into consideration various variables that represent macroeconomic distortion policies; a country’s economic size; the quality of government institutions; and labor market regulation. Using different proxies for trade policies, the results of the Pooled Mean Group (PMG) shows that trade liberalization policies appear to decrease unemployment rates over time. The finding supports contemporary calls to participate in international trade to facilitate job creation. However, further studies are required to identify the specific channels through which trade policies can affect unemployment in the Arab region.

Institutional quality, macroeconomic uncertainty and efficiency of financial institutions in Sub-Saharan Africa

PurposeThis paper evaluates how institutions of governance and macroeconomic uncertainty influence efficiency of financial institutions in the subregion of Sub-Saharan Africa (SSA). Data for the empirical inquiry were compiled from relevant sources for 33 countries in the subregion from 2002 to 2019. Empirical estimates verifying hypothesized relationships were carried out using the continuous updating estimator (CUE) by Hansen et al. (1996).Design/methodology/approachThe purpose of this paper is to evaluates how institutions of governance and macroeconomic uncertainty influence efficiency of financial institutions in the subregion of Sub-Saharan Africa (SSA). Data for the empirical inquiry were compiled from relevant sources for 33 countries in the subregion from 2002 to 2019. Empirical estimates verifying hypothesized relationships were carried out using the continuous updating estimator (CUE) by Hansen et al. (1996).FindingsThe results suggest that institutional quality has significant positive effect on financial institution efficiency, supporting the view that improved and supportive structures of governance tend to promote operational efficiency among financial institutions among economies in SSA. In addition, improvement in individual governance indicators such as corruption control, government effectiveness, regulatory quality and rule of law was also found to support or enhance efficiency of financial institutions among economies in the subregion. Macroeconomic uncertainty on the other hand is found to impede efficiency of financial institutions; the same condition (macroeconomic uncertainty) is further found to negate any positive impact corruption control, government effectiveness, regulatory quality and rule of law have on operational efficiency among financial institutions in the subregion.Originality/valueUnlike most of related studies, this study adopts a different approach on the dynamics of financial institutions. Approach pursued in this empirical inquiry examines how the regulatory environment within which financial institutions operate, the form of governance and the quality of government institutions influence efficiency of financial institutions among emerging economies in Sub-Sahara. Empirical analysis conducted examines effects of variables that are unique to this study; these variables are either constructed or econometrically derived specifically for various interactions verified in the study. For instance, institutional quality variable is an index constructed specifically for this study using principal component analysis approach.

E-procurement and firm corruption to secure public contracts: The moderating role of governance institutions and supranational support

This paper investigates the effects of e-procurement on firm corruption to secure public contracts, highlighting the moderating roles of the quality of governance institutions and supranational support in that relationship. Taking transaction cost economics as our theoretical lens, and building on a sample of 8,373 firms in 72 countries from 2008 to 2019, we find that the adoption of an e-procurement system in fact reduces firm corruption. However, this effect is only unveiled once one accounts in the analysis for the quality of country-level governance institutions, which also makes the relationship stronger. We also find an e-procurement system only to effectively address firm corruption when it benefits from supranational support. The study contributes to the ongoing academic debate on the impact of digitalization on corruption.

Service Quality of Government Institution and Its Influence on Public Satisfaction (Study in Regency/City Government of North Sulawesi)

This study aims to empirically examine the influences of the service quality of government institutions on public satisfaction and the degree of influences of service quality among regencies/cities in the North Sulawesi Province. This study focuses on the performance measurement of One-Stop Integrated Service and Investment Service. Respondents of this research are a community in four regencies/cities in the province of North Sulawesi that is Manado City, Bitung City, Bolaang Mongondow Regency, and Kotamobagu City. The respondents are those who have experienced the services provided by One-Stop Integrated Service and Investment Service institutions in those regencies/cities. This study uses a survey method that distributes questionnaires to each region. The data analysis method uses multiple linear regression analyses. The results show that of the 6 (six) hypotheses, 5 (five) hypotheses were supported and 1 (one) hypothesis was not supported. Supported hypotheses are 1, 2, 3, 4, and 5 hypotheses. Meanwhile, the 6 hypotheses are not supported.

NATURAL RESOURCE RENTS AND INTERNAL CONFLICT: THE ROLE OF INSTITUTIONAL QUALITY

The study explores the impact of natural resource rents on internal conflicts and examines how the aforementioned relationship is influenced by institutional quality. The study is based on a panel dataset of 70 countries for the period 1991–2018. The empirical evidence shows that natural resource rent leads to an increase in internal conflict in both developed and developing countries. However, the impact of natural resource rent on internal conflict is negative in the presence of better quality of government institutions for the global sample, developed and developing countries. Hence, natural resource rent leads to a reduction in internal conflict when it is supported by better institutional quality in terms of high bureaucratic quality, rule of law and low corruption in government institutions. Overall, the study finds that natural resource rent leads to an increase in internal conflict, however, this relationship is mitigated by better institutional quality.

Calibrating the Economic Impact of a Deficit in the Institutional Quality of Government: The Case of Spain

The quality of government institutions and the absence of corruption are key factors of economic development. How could we quantify, for any given country, the overall monetary cost of poor-quality institutions? This paper compares the institutional quality in Spain with those of the rest of the world and assesses the economic cost of the deficit of institutional quality in the country. Although Spain is among the top 20% of countries worldwide in terms of the quality of governance institutions, the value of the Spanish governance indicators is below what corresponds to Spain’s economic development level. The authors calibrate the effect that a correction of the deficit of institutional quality would have on Spanish income under different parameter scenarios and always finds a high positive potential impact. The method we introduce to conduct these calibrations can serve as a useful blueprint for the analysis of other countries.

Determinants of governance institutional quality in sub-saharan africa

ABSTRACT The paper hypothesizes that the quality of institutions tends to evolve slowly and in a piecemeal nature over time. In this process policy is seen to be a mechanism through which this evolutionary process takes place. Policy influences intermediary variables, which in turn create opportunities for institutional innovation. There are two hypotheses derived from this analysis and tested empirically in the paper. It is hypothesized that improvements in institutional quality lead to increases in economic development (using two different measures). It is also hypothesized that changes in intermediary variables resulting from policy changes lead to improvements in institutional quality. These two hypotheses are tested using a panel data set made up of twenty-five countries in Africa. The results indicate that improvements in the quality of governance institutions do lead to improvements in economic development and that policies aimed at influencing intermediary variables lead to improvements in governance institutional quality.

Transformation of the public service of Ukraine into an institution of social interaction in the context of the global crisis

The article substantiates the conceptual foundations of the transformation of the public service of Ukraine into the institution of social interaction as one of the most important conditions for overcoming the socio-economic crisis and effective implementation of social reforms. The paper analyzes the current state of crisis in which society and the institution of public service, as the main subject of formation and implementation of public development strategy. It is emphasized that the systemic crisis may well be the factor that changes the social system in the direction of reducing entropy and contributes to the restructuring of the format of the relationship between public service and society. Favorable factors have been identified that accelerate the achievement of a new qualitative state of organization and functioning of the public service in the process of overcoming the crisis. The necessity of cardinal institutional changes at the highest levels of state power, namely in the triangle "Verkhovna Rada – President – Cabinet of Ministers" is substantiated. Based on research conducted by the Razumkov Centre's sociological service from February 13 to 17, 2020, as well as from April 24 to 29, 2020 (by telephone interview), there is a significant decrease in the professionalism and quality of government institutions, which leads to a decline in public confidence. public service. Emphasis is placed on the need to amend the relevant laws of Ukraine, which will be the first step towards the preparation of a single integrated bill "On Public Service in Ukraine", which should introduce fundamental principles for the functioning of public service as an institution of public interaction. It is proved that the process of transformation of the public service of Ukraine into an institution of social interaction should take place at all levels of public power through constructive social self-organization and broad involvement of citizens in the management process. The role of leaders of territorial communities is highlighted, who on the basis of constant social dialogue and partnership with the community should ensure constructive social self-organization and minimize the consequences of the crisis.

What factors influence the quality of governance institutions? An Asian perspective

This paper focuses on the process by which the quality of institutions has changed in developing Asia. It is argued that much institutional change is the result of a slow, piecemeal, evolutionary process that is often set in motion via changes in economic policy. Specifically, the quality of particular governance institutions is often dependent on economic policy. Various measures of governance institutional quality, for eleven developing countries in Asia, constructed by the World Bank are used to empirically test the hypothesis. The results of the estimations indicate that policies related to enhancing agricultural labor productivity, reducing dependence on natural resources, and increasing school enrollments have been most important in terms of positively influencing the quality of governance institutions developing Asia.

Efektywność ekologiczna: fragmentacja etniczna a jakość zarządzania i zrównoważony rozwój

The article is devoted to the consideration of the ethical and ecological aspect of the framework conditions for the welfare state formation. The hypothesis of the negative influence of high ethnic fractionalization on the ecological situation in a country that in the classical welfare states is offset by the high efficiency of government through the initiation of the function of balancing the interests of ethnic groups in the transmission buffer mechanism is tested in the paper. The study used correlation and regression analysis tools using the application statistical software package STATISTICA. The hypothesis of an inverse relationship between the degree of heterogeneous society and the ecological quality is empirically substantiated. It is proved that the quality of governance can weaken the inverse relationship between ethnic fractionalization and the ecological situation in the country. In the welfare states, the neutralization factor of ethnic fractionalization by the quality of governance institutions is traced, which testifies to the existence of an institutional transmission buffer mechanism in the relationship between the structure of society and the offer of environmental goods.

Why regions fail (or succeed). The Role of Government Institutions in the Long-Run

This paper represents an attempt to reconcile some general intuitions provided by Daron Acemoglu and James A. Robinson in the book “Why Nations Fail” with the case of the deep regional disparities in the economic performances observed within the “Western” European Union during the period 2001-2015. By adopting an approach to growth analysis based on binary response models, this paper quantifies the extent to which the quality of government institutions has shaped regional economic performances in the European Union throughout the period comprising the Great Recession. Empirical results show that: 1) The higher is the quality of institutions, the higher is the probability that a region with high income per capita will grow above the levels of the European Union as a whole. 2) The higher is the quality of institutions, the lower is the probability that a low-income region will grow below the levels of European Union as a whole. 3) The higher is the quality of institutions, the higher (lower) is the probability that any region, regardless of its income per capita, will outperform (underperform) the European Union as a whole. 4) The higher is the quality of Institutions, the lower is the probability that a region will “fail” to grow.

Perceptions of institutional quality and justification of tax evasion

According to the world values survey, citizens justification of tax evasion varies widely across individuals and countries. We explore in this paper how justification of tax evasion covaries across individuals and countries with measures of government quality and the survey respondents own perceptions of the institutional quality. We study three proxies for individuals assessment of institutional quality, namely confidence in government, in civil service and in justice. We find only weak evidence that better assessments of the quality of government institutions are associated with less justification of tax evasion.

Quality of governance and varieties of capitalism in the European Union: core and periphery division?

ABSTRACTA growing body of literature suggests that the quality of governance has a significant effect on economic development. Investigations highlight that the quality of government institutions varies substantially in the European Union. These differences raise the question of whether they comply with the various models of capitalism. However, the various approaches of institutional analyses either neglect the role of the state or consider only the welfare function and the extent of state intervention. This article uses the databases of the World Bank and the World Economic Forum to classify the members of the European Union into clusters based on the quality of governance. Cluster analyses find notably clear-cut clusters in both cases. These clusters do not coincide with the usual varieties of capitalism; instead, they indicate a gap between the northern and western vs. the southern and eastern European countries, which is a core vs. periphery division. This gap indicates a long-lasting challenge in the deepening of European integration.

Does governance quality promote innovation in sub-Saharan Africa? An empirical study across 37 countries

ABSTRACTThis inquiry examines the effect of quality of governance institutions on innovation in 37 sub-Saharan African countries for the period 1996–2016. The empirical analysis followed the instrumental variables regression technique. The motivation for using this estimation technique is to provide special focus to the issue of endogeneity by estimating IV general methods of moment’s model. The following general findings are presented. First, governance quality does, in fact, appear to promote innovativeness. Second, for all governance indicators, the effect of the quality of governance institutions follows two channels: directly and indirectly through its positive impact on human capital development. The empirical findings suggest that countries with better quality of governance infrastructure are able to promote innovation in better ways. That is, the results do support theories that argue in favour of the development of governance quality and the improvement of human capital infrastructure to foster the national innovation system. These results are found to be robust across alternative empirical specifications tested.

The Impact of National Institutional Quality on International Tourism Inflows: a Cross-country Evidence

This article explores the effects of the overall quality of national governance institutions of a country, along with the quality of some of its key characteristics, on international tourism inflows and the revenues a country derives from them. This article argues that increases in institutional quality reduce transaction costs and risks faced by both suppliers of international tourist services and tourists. We hypothesize that countries with "higher quality" of governance institutions are likely to attract more international tourists and derive more revenues from them. Our hypothesis is tested using panel data drawn from 108 countries between 1996 and 2011. The results strongly support the hypothesis. This study found that regulatory quality and the rule of law are the governance characteristics that have the most impact on international tourism flows. Improvement of institutional quality has more impact on tourism in high income countries than in emerging economies. The results are robust to different estimation methods, different measures of international tourism and institutional quality.

Quality of government institutions and spreads on sovereign credit default swaps

We examine how the quality of government institutions affects the likelihood of sovereign default. We find both economically and statistically significant adverse effects of country governance indicators on sovereign credit default swap spreads. The evidence suggests that better-quality governance enhances a country’s willingness to repay debt, and hence reduces the probability of sovereign default. The results still hold after we account for potential endogeneity and conduct a number of robustness tests.