Original scientific paper
https://doi.org/10.18045/zbefri.2022.1.147
Long-run effects of human development and public governance on economic welfare: New evidence from transition economies
Emin Efecan Aktas
orcid.org/0000-0001-7751-3275
Abstract
The study attempts to gauge the impact of human development and public
governance quality on economic welfare in the long term. The basic proposal of the
analysis is that economic growth and/or development cannot be the measurement of
the value of economic performance. For this reason, the Economic Prosperity Index,
developed by the “Legatum Institute” is the dependent variable of the linear
logarithmic model estimated in the paper. Besides, the measurement of economic
welfare, (public) governance quality, which neoclassical economics ignored for a
certain period, is considered an important input to human development. By taking
these two variables into the research center, the study sights the rise in the prosperity
(welfare) of 31 transition economies that achieved intense development after the
2000s from 2007 to 2020. Transition economies are selected owing to the rapid
development and strong welfare effects they have reached with the millennium. So,
the main hypothesis of the research is that transition economies have high human
development and good governance that creates economic prosperity. By applying
this research question, cross-sectional dependence and slope homogeneity tests, unit
root tests, and co-integration tests, the author has conducted the lag length selection
before the long-run relationship. Comprehensive analysis findings reveal that both
indicators enhance economic prosperity by positively affecting them in the long run
and that some of the deviations are improved.
Keywords
economic welfare; human development; governance; transition economies; panel data
Hrčak ID:
279911
URI
Publication date:
30.6.2022.
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