What is the relationships between governance and
human development?
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What is the relationships between governance and
human development?
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Answer:
Good governance promotes accountability, transparency, efficiency and rule of law at all levels and allows efficient management of human, natural, economic and financial resources for equitable and sustainable development, guaranteeing civil society participation in decision-making processes.
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Abstract and Figures
This paper tests the relationship between governance and human development in EU-27, using panel data for 2002-2017 time interval. The literature suggests a direct link between human development and good governance. Thus, the study is interested to note if a good governance lead to better living standards or there exist an inverse direction relationship. This study considers all six proxies that define Good Governance: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The proxy of living standards is based on the values of Human Development Index, an index widely used, composited from life expectancy, education and per capita income indicators. The main focus of the paper is to confirm two hypotheses. Firstly, it tries to examine whether the above-mentioned relationship is positive and secondly, whether the causality direction of these two variables is bi-directional. Therefore, the Granger Causality test is employed to find out the causality direction of these two main variables.
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