Growth without Governance

It is well known that there is a strong positive correlation between per capita incomes and the quality of governance across countries. the authors propose an empirical strategy that allows separation of this correlation into (1) a strong positive...

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Bibliographic Details
Main Authors:	Kaufmann, Daniel, Kraay, Aart
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTABILITY MEASURE AGGREGATE GOVERNANCE AGGREGATE GOVERNANCE INDICATOR AGGREGATE GOVERNANCE INDICATORS AGGREGATE INDICATORS AGGREGATION METHODOLOGY AGGREGATION PROCEDURE ANTICORRUPTION ANTICORRUPTION LEGISLATION AUTHORITY BROAD DEFINITION OF GOVERNANCE BROADER ASPECT OF GOVERNANCE BUREAUCRACY BUSINESS DEVELOPMENT BUSINESS ENVIRONMENT CAPITA INCOME ON GOVERNANCE CAPITA INCOME TO BETTER GOVERNANCE OUTCOMES CAPITA INCOME TO GOVERNANCE CAPITA INCOMES ON GOVERNANCE CAPITA INCOMES TO GOVERNANCE CAUSAL EFFECT CAUSAL EFFECTS CHANGES IN GOVERNMENT CHOICE OF UNITS FOR GOVERNANCE CITIZEN CITIZENS CIVIL LIBERTIES CIVIL SERVANTS CIVIL SERVICE CIVIL SOCIETY CIVIL SOCIETY AT LARGE COLONIES COMMITMENT TO POLICIES COMPARISONS ACROSS SOURCES COMPARISONS OF GOVERNANCE COMPOSITE GOVERNANCE INDICATORS CONDITIONAL DISTRIBUTION OF GOVERNANCE CONSEQUENCES OF GOVERNANCE CONTINUITY OF POLICIES CONTROL OF CORRUPTION CONVENTIONAL WISDOM CORRUPTION CORRUPTION CONTROL CORRUPTION INDICATORS COUNTRY COMPARABILITY COUNTRY COVERAGE COUNTRY RANKINGS COUNTRY RATINGS COUNTRY RISK GUIDE COUNTRY RISK REVIEW COUNTRY RISK SERVICE CRIME CRIMINALS CURRENT INSTITUTIONAL QUALITY DECLINES IN GOVERNANCE DEPENDENCE OF GOVERNANCE ON INCOMES DETERIORATION IN GOVERNANCE DIAGNOSTIC SURVEYS DIMENSIONS OF GOVERNANCE DIRECTIONS BETWEEN GOVERNANCE DISTRIBUTION OF GOVERNANCE DISTRIBUTION OF GOVERNANCE ESTIMATES DISTURBANCE TERM ECONOMIC DEVELOPMENT EFFECT OF GOVERNANCE EFFECTS OF CORRUPTION EFFECTS OF GOVERNANCE EFFECTS OF GOVERNANCE ON GROWTH EFFECTS OF GOVERNANCE ON INCOMES EFFECTS OF INCOME ON GOVERNANCE ENFORCEABILITY EXCHANGE OF IDEAS FAILURE OF GOVERNANCE FEEDBACK FROM INCOMES TO GOVERNANCE FINAL SET OF GOVERNANCE ESTIMATES FOREIGN INVESTORS FOREIGN TRADE FORMAL INSTITUTIONS GOOD GOVERNANCE GOOD INSTITUTIONS GOOD POLICIES GOVERNANCE ABSENCE GOVERNANCE CLUSTER GOVERNANCE CLUSTERS GOVERNANCE DATA GOVERNANCE DATABASE GOVERNANCE DIAGNOSTIC GOVERNANCE ESTIMATE GOVERNANCE ESTIMATES GOVERNANCE INDICATOR GOVERNANCE OUTCOMES GOVERNANCE PERCEPTIONS GOVERNANCE PERFORMANCE GOVERNANCE PERFORMANCE OF COUNTRIES GOVERNANCE RATING GOVERNANCE SCALE GOVERNMENT EFFECTIVENESS GRAFT GRAND CORRUPTION IMPROVEMENTS IN GOVERNANCE INCIDENCE OF MARKET-UNFRIENDLY POLICIES INCOME LEVELS INSTITUTIONAL QUALITY INSTITUTIONAL QUALITY RELATIVE INTERNATIONAL ORGANIZATIONS JUDICIARY LAW INDICATOR LEGISLATION LEVELS OF GOVERNANCE MEASURE OF GOVERNANCE MEASUREMENT ERROR MEASUREMENT ERROR IN GOVERNANCE MEASURES PERCEPTIONS OF CORRUPTION MEASURING GOVERNANCE MEDIA MISGOVERNANCE NATIONS NEGATIVE FEEDBACK FROM INCOMES TO GOVERNANCE NONGOVERNMENTAL ORGANIZATIONS NOTIONS OF GOVERNANCE OBSERVABLE PROXY FOR GOVERNANCE PER CAPITA INCOME PER CAPITA INCOMES POLICY RESEARCH POLITICAL ACCOUNTABILITY POLITICAL ECONOMIC RISK POLITICAL RIGHTS POLITICAL RISK POLITICAL STABILITY PRESENCE OF CORRUPTION PRIORITIES PUBLIC GOODS PUBLIC OFFICIAL PUBLIC POLICY PUBLIC POWER PUBLIC SERVICE PUBLIC SERVICE PROVISION PURCHASING POWER PURCHASING POWER PARITY QUALITY OF GOVERNANCE QUALITY OF GOVERNANCE ACROSS COUNTRIES QUALITY OF PUBLIC REGIONAL DIFFERENCES IN GOVERNANCE REGULATORY QUALITY REVERSE CAUSATION RISK RATING AGENCIES RULE OF LAW SET OF AGGREGATE GOVERNANCE INDICATORS SET OF GOVERNANCE INDICATORS SET OF GOVERNANCE MEASURES SET OF WORLDWIDE GOVERNANCE INDICATORS SOCIAL INSTITUTIONS SOCIAL INTERACTIONS SOURCES OF UNCERTAINTY SUBJECTIVE GOVERNANCE DATA SUBJECTIVE INDICATORS SUBJECTIVE PERCEPTIONS TRANSITION ECONOMIES UNOBSERVED COMMON COMPONENT OF GOVERNANCE UNOBSERVED COMPONENTS MODEL UNOBSERVED GOVERNANCE
Online Access:	http://documents.worldbank.org/curated/en/2002/11/2075846/growth-without-governance http://hdl.handle.net/10986/19206

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Summary:	It is well known that there is a strong positive correlation between per capita incomes and the quality of governance across countries. the authors propose an empirical strategy that allows separation of this correlation into (1) a strong positive causal effect running from better governance to higher per capita incomes, and, perhaps surprisingly at first, (2) a weak and even negative causal effect running in the opposite direction from per capita incomes to governance. The first result confirms existing evidence on the importance of good governance for economic development. The second result is new and suggests the absence of a "virtuous circle" in which higher incomes lead to further improvements in governance. This motivates the authors' choice of title, "Growth Without Governance." They document this evidence using a newly updated set of worldwide governance-indicators covering 175 countries for the period 2000-01, and use the results to interpret the relationship between incomes and governance focusing on the Latin America and Caribbean region-within a worldwide empirical context. Finally, the authors speculate about the potential importance of elite influence and state capture in accounting for the surprising negative effects of per capita incomes on governance, present some evidence on such capture in some Latin American countries, and suggest priorities for actions to improve governance when such pernicious elite influence shapes public policy.

Growth without Governance

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