Proceedings of The 3rd International Conference on Future of Social Sciences
The Linkage between Governance and Growth
Quality of government is a precondition for economic growth and development as it can lead to the improvement of government’s work efficiency and effectiveness as well as trust from its citizen. To improve its quality, the government needs to complete some specific functions which are combined to form the so-called “good governance”. This governance is defined by various functions of government and its positive influence on economic growth has been proved by previous works of many scholars. Although the overall picture of the linkage between governance and economic growth has been derived, it is still valuable to elaborate more on the linkage between each composition of governance and the growth of the economy. Thus, in this work, we represent such linkage by proving the linkage between some functions defined by governance, namely corruption control, regulatory quality improvement, and accountability creation, and economic growth. To meet our objective, we utilized the data of 10 ASEAN countries from the World Bank database which covers the period between 1996 and 2018 and the panel regression technique to verify such linkage. The results produced from the cointegration test showed that corruption control and accountability were positively linked to economic growth, while the regulation quality linked negatively to economic growth. Therefore the government should focus on reducing corruption, improving accountability and optimally regulating its economy to encourage economic growth.
Keywords: Corruption control, Regulatory quality, Accountability, Panel data, ASEAN countries.