The Effects of Governance Indicators on Per Capita Income, Investment and Employment in Selected Mena Countries

Abstract

Governance is a way of exercising power in economic and social resource management of a country. Good governance criteria have different weights and relation with regard to the conditions and information of any country. This study is a descriptive survey and has been carried out to calculate the coefficients and weights of each indicator of good governance in Mena countries and identification of the causal relationship between these indicators and their effects on per capita income, investment and employment. After identifying indicators of good governance by Granger causality test and vector Auto-regression test, causal relationships of good governance indices were analyzed in the form of statistical hypotheses. Then, the weight of each indicator was calculated by distributing a questionnaire among the experts in the field of good governance by using fuzzy hierarchical analysis and the relationship between main governance indicators and employment-highlighted indices investigated. Among the research results, high weight of accountability, voice and accountability and social justice indicators can be pointed out compared to other good governance indices. By examining panel systematic investigating of per capita income, investment and employment on governance indicators and other variables, such as credits, export and interest rates, it is observed that governance indicators have a significant positive effect in each three regression equations.