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The Relationship between Governance and Economic Development: An Empirical Analysis from 1996 to 2019 for Albania

Year 2020, Volume: 19 , 31 - 40, 31.12.2020

Abstract

There is an on-going debate on the effect of governance on the economic development of a country. In an effort to shed some light on this matter, this article aims to identify the relationship between good governance and economic growth in Albania, considering that good governance might create the right habitat for economic growth.The values for the good governance index are calculated using the Principal Component Analysis and the values for the World Governance Indicators – WGI for Albania, taken from the World Bank database for 1996-2019 time periods. This period coincides with a series of important transformations undertaken by governments in Albania after the fall of the communist regime in 1990. The methods used are the regression analysis and the Granger Causality test. Main results: By analyzing the 1996-2019 time period data, we conclude that Good Governance is not a statistically significant factor for economic development in Albania and the Granger causality test indicates that neither of variables causes the other.

References

  • Aikins, S., (2009), Global financial crisis and government intervention: A Case for effective regulatory governance, International Public Management Review, 10(2): 23-43.
  • Alam, R., Kitenge E., Bedane B., (2017). Government effectiveness and economic growth, economics bulletin, Access Econ, 37(1), 222-227.
  • AlBassam, B. A. (2013). The relationship between governance and economic growth during times of crisis. European Journal of Sustainable Development, 2(2), 1.
  • Civici, A. (2020). Tiparet E Rritjes Ekonomike Në Shqipëri 1992-2018. Ndërtimi I Profilit Të Ri Të Ekonomisë Shqiptare. Forumi – Modeli Ekonomik & Sfidat.
  • Davidoff, S. M., & Zaring, D. (2009). Regulation by deal: The government's response to the financial crisis. Admin. L. Rev., 61, 463.
  • Freedom House Raport, (2020), Freedom in the World – Albania Country Report 2020, Retrieved from https://freedomhouse.org/report/special-report/2020/democracy-under-lockdown
  • Hall, R. E., & Jones, C. I. (1999). Why do some countries produce so much more output per worker than others? (No. w6564). National Bureau of Economic Research.
  • Hashem, E. (2019). The Impact of governance on economic growth and human development during crisis in middle east and north africa. International Journal of Economics and Finance, 11, 8; 61-79.
  • Kaufmann D., Kraay A., & Mastruzzi M., (2010), The worldwide governance indicators methodology and analytical issues. The World Bank Development Research Group Macroeconomics and Growth Team, Policy Research Working Paper 5430
  • Kaufman, D,, Kraay, A & Mastruzzi, M (2015). The worldwide governance indicators methodology and analytical issues, Hague Journal on the Rule of Law volume 3, 220–246.
  • Khan, M.H. (1995). State failure in weak states: A critique of new institutionalist explanations, in harriss, John, Janet Hunter and Colin M. Lewis (eds). The New Institutional Economics and Third World Development, London: Routledge.
  • Kraay A., Kaufmann D., & Mastruzzi M., (2010). The worldwide governance indicators: Methodology andanalytical issues. Draft Policy Research Working Paper, World Bank.
  • Mira. R, Hammadache. A, (2018). Good Governance and Economic Growth: A Contribution to the Institutional Debate about State Failure in Middle East and North Africa. Journal of Middle Eastern and Islamic Studies, 11(3), 107-120
  • Pere, E., (2015). The impact of good governance in the economic development of western Balkan countries. European Journal of Government and Economics, 4(1), 25-45.
  • World Bank (1992). Governance and Development. Washington, D.C.
Year 2020, Volume: 19 , 31 - 40, 31.12.2020

Abstract

References

  • Aikins, S., (2009), Global financial crisis and government intervention: A Case for effective regulatory governance, International Public Management Review, 10(2): 23-43.
  • Alam, R., Kitenge E., Bedane B., (2017). Government effectiveness and economic growth, economics bulletin, Access Econ, 37(1), 222-227.
  • AlBassam, B. A. (2013). The relationship between governance and economic growth during times of crisis. European Journal of Sustainable Development, 2(2), 1.
  • Civici, A. (2020). Tiparet E Rritjes Ekonomike Në Shqipëri 1992-2018. Ndërtimi I Profilit Të Ri Të Ekonomisë Shqiptare. Forumi – Modeli Ekonomik & Sfidat.
  • Davidoff, S. M., & Zaring, D. (2009). Regulation by deal: The government's response to the financial crisis. Admin. L. Rev., 61, 463.
  • Freedom House Raport, (2020), Freedom in the World – Albania Country Report 2020, Retrieved from https://freedomhouse.org/report/special-report/2020/democracy-under-lockdown
  • Hall, R. E., & Jones, C. I. (1999). Why do some countries produce so much more output per worker than others? (No. w6564). National Bureau of Economic Research.
  • Hashem, E. (2019). The Impact of governance on economic growth and human development during crisis in middle east and north africa. International Journal of Economics and Finance, 11, 8; 61-79.
  • Kaufmann D., Kraay A., & Mastruzzi M., (2010), The worldwide governance indicators methodology and analytical issues. The World Bank Development Research Group Macroeconomics and Growth Team, Policy Research Working Paper 5430
  • Kaufman, D,, Kraay, A & Mastruzzi, M (2015). The worldwide governance indicators methodology and analytical issues, Hague Journal on the Rule of Law volume 3, 220–246.
  • Khan, M.H. (1995). State failure in weak states: A critique of new institutionalist explanations, in harriss, John, Janet Hunter and Colin M. Lewis (eds). The New Institutional Economics and Third World Development, London: Routledge.
  • Kraay A., Kaufmann D., & Mastruzzi M., (2010). The worldwide governance indicators: Methodology andanalytical issues. Draft Policy Research Working Paper, World Bank.
  • Mira. R, Hammadache. A, (2018). Good Governance and Economic Growth: A Contribution to the Institutional Debate about State Failure in Middle East and North Africa. Journal of Middle Eastern and Islamic Studies, 11(3), 107-120
  • Pere, E., (2015). The impact of good governance in the economic development of western Balkan countries. European Journal of Government and Economics, 4(1), 25-45.
  • World Bank (1992). Governance and Development. Washington, D.C.
There are 15 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Teuta Xhındı This is me

Olgerta Idrızı This is me

Publication Date December 31, 2020
Published in Issue Year 2020 Volume: 19

Cite

APA Xhındı, T., & Idrızı, O. (2020). The Relationship between Governance and Economic Development: An Empirical Analysis from 1996 to 2019 for Albania. The Eurasia Proceedings of Educational and Social Sciences, 19, 31-40.