New Empirical Evidences on the Linkages between Governance and Growth

By using data from 145 jurisdictions, for the time span 2002-2009, the present paper supports the thesis of a positive and significant correlation between governance’ quality and economic growth. In order to achieve this outcome, the elements of governance reported by Worldwide Governance Indicators World Bank’ project are considered and a global indicator in a principal components analysis framework is constructed. Based on this estimator, we identify a clear pattern of the benefic impact of “good governance” on growth, by involving a GMM-System estimation. This pattern appears robust to the check for governance endogeneity and to the changes in the estimation methodology