Panel data analysis reveals development-dependent impacts of governance on economic growth across 155 nations, highlighting the need for tailored institutional reform pacing.
Key Points
Investigate how individual dimensions of governance quality heterogeneously affect economic growth across different stages of national economic development.
Analyzed panel data from 155 countries spanning 1996 to 2024, stratified across least developed, developing, transitional, and developed economies.
Applied an interaction fixed-effects model examining contemporaneous and lagged impacts of the six Worldwide Governance Indicators (WGI).
Political Stability consistently supported economic growth across all development categories.
Government Effectiveness and Rule of Law demonstrated contrasting contemporaneous versus lagged effects, reflecting short-term economic adjustment costs during administrative formalization.
Control of Corruption and Voice and Accountability showed limited or context-dependent significance, offering support for institutional sequencing rather than standardized reform models.