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Good Governance and Growth in Emerging Countries: A Critical Review



Author(s)

Rachid Mira

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DOI:10.17265/2328-2134/2018.04.002

Numbers of economists of development consider that good governance, defined as the quality management and orientation of development policies has a positive influence on economic performance. The question is what content the literature gives to the concept of governance. According to the World Bank, good governance is evaluated by the implementation capacity of governance principles of a country, providing a framework for market development and economic growth. Empirical studies tested the relationship between good governance in the sense of “market-enhancing governance” (stimulus institutions market) and showed a positive relationship between good governance and economic growth. However, a good governance policy needs for developing countries to achieve minimum economic growth and political reforms in order to reach a level of development similar to that of industrialized countries. We focus on good governance definition made by the World Bank and criticism formulated by Mushtaq Khan, who reconstructed the notion of Governance Capabilities, taking into account the capacity of states to drive structural change in institutional, political, economic, and social fields, in order to ensure long-term economic growth. Our goal is to use a new concept of governance in order to build a new political economy approach more suitable for emerging countries.

states failures, good governance, economic growth, development policy