Causal Linkage between Political, Economic, Institutional Governance & Economic Growth: An evidence from the selected GCC Countries
DOI:
https://doi.org/10.32890/jgd2019.15.1.4Keywords:
Governance, Economic Growth, Granger Causality, GCC CountriesAbstract
The current study measures the causal relationship between governance and economic growth in GCC countries from 2001 until 2016 with Granger causality. This study found the economic governance and institutional governance are signiï¬cant to the GCC economic development, while the political governance is not signiï¬cant. There is bidirectional causality between institutional governance and growth. Evidence of bidirectional causality between economic governance and growth in GCC countries also implied the liberalisation of the market matters for their economic development. In other words, although political governance does not cause economic growth, the ï¬nding of unidirectional causality from institutional governance and political governance suggest that the political leaders might influence the democracy of the GCC countries. A major policy implication emanating from the ï¬ndings was that the economic governance and the institution’s governance were crucial to the achievement of sustained economic growth in GCC countries due to the reinforcing effect. However, both economic governance and institution governance are independent of each other.
References
Acemoglu, D., & Robinson, J. (2010). The role of institutions in growth and development. Leadership and Growth, 135.
Adams, S., & Mengistu, B. (2008). Privatization, governance and economic development in developing countries. Journal of Developing Societies, 24(4), 415-438.
Al Mamun, M., Sohag, K., & Hassan, M. K. (2017). Governance, resources and growth. Economic Modelling, 63, 238-261.
Alam, M. R., Kiterage, E., & Bizuayehu, B. (2017). Government effectiveness and economic growth. Economic Bulletin, 37(1), 222-227.
Albassam, B. A. (2013a). The Influence of the Global Economic Crisis on the Relationship Between Governance and Economic Growth: Florida Atlantic University.
AlBassam, B. A. (2013b). The relationship between governance and economic growth during times of crisis. European Journal of Sustainable Development, 2(2), 1-18.
Asongu, S. A. (2017). Fighting Corruption when Existing Corruption Control Levels Count: What do Wealth-Effects Tell us in Africa? Institutions and Economies, 53-74.
Azariadis, C., & Lahiri, A. (2002). Do Rich Countries Choose Better Governments? Contributions in Macroeconomics, 2(1), 1-37.
De Groot, H. L., Linders, G. J., Rietveld, P., & Subramanian, U. (2004). The institutional determinants of bilateral trade patterns. Kyklos, 57(1), 103-123.
Dollar, D., & Kraay, A. (2002). Growth is Good for the Poor. Journal of Economic Growth, 7(3), 195-225.
Easterly, W., & Levine, R. (2003). Tropics, germs, and crops: how endowments influence economic development. Journal of Monetary Economics, 50(1), 3-39.
Emara, N., & Chiu, I.-M. (2016). The Impact of Governance on Economic Growth: The Case of Middle Eastern and North African Countries.
Fraj, S. H., Hamdaoui, M., & Maktouf, S. (2018). Governance and economic growth: The role of the exchange rate regime. International Economics.
Furubotn, E., & Richter, R. (2005). Institutions and Economic Theory: The Contribution of the New Institutional Economics (Economics, Cognition, and Society).
Furubotn, E. G., & Richter, R. (2005). Institutions and Economic Theory: The Contribution of the New Institutional Economics: University of Michigan Press.
Garcia-Sanchez, I. M., Cuadrado-Ballesteros, B., & Frias-Aceituno, J. (2013). Determinants of government effectiveness. International Journal of Public Administration, 36(8), 567-577.
Huang, C.-J., & Ho, Y.-H. (2017). Governance and economic growth in Asia. The North American Journal of Economics and Finance, 39, 260-272.
Hvidt, M. (2011). Economic and institutional reforms in the Arab Gulf countries. The Middle East Journal, 65(1), 85-102.
Jalilian, H., Kirkpatrick, C., & Parker, D. (2007). The impact of regulation on economic growth in developing countries: A cross-country analysis. World Development, 35(1), 87-103.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2007). The worldwide governance indicators project: Answering the critics: The World Bank.
Kaufmann, D., Kraay, A., & Zoido-Lobaton, P. (1999). Governance matters (World Bank Policy Research Working Paper No. 2196). Washington, DC: World Bank.
Kurtz, M. J., & Schrank, A. (2007). Growth and governance: Models, measures, and mechanisms. The Journal of Politics, 69(2), 538-554.
Mantzavinos, C. (2001). Individuals, Markets and Institutions: Cambridge: Cambridge University Press.
Méndez-Picazo, M.-T., Galindo-Martín, M.-Á., & Ribeiro-Soriano, D. (2012). Governance, entrepreneurship and economic growth. Entrepreneurship & Regional Development, 24(9-10), 865-877.
Nawaz, S. (2015). Growth effects of institutions: A disaggregated analysis. Economic Modelling, 45, 118-126.
North, D. C. (1991). Institutions. Journal of EconomicPerspectives, 5(1), 97-112.
Przeworski, A., Alvarez, M. E., Cheibub, J. A., & Limongi, F. (2000). Democracy and development: political institutions and well-being in the world, 1950-1990 (Vol. 3): Cambridge University Press.
Rigobon, R., & Rodrik, D. (2005). Rule of law, democracy, openness, and income: Estimating the interrelationships. Economics of Transition, 13(3), 533-564.
Smith, B. C. (2007). Good governance and development: Macmillan International Higher Education.
Wilson, R. (2016). Does governance cause growth? Evidence from China. World Development, 79, 138-151.
Published
Issue
Section
How to Cite
Research impact
Harvested 2026-09-08Counts differ between services because each indexes a different body of literature. None of them is the whole picture.
