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Economics of Governance

, Volume 6, Issue 1, pp 75–90 | Cite as

Does better governance foster efficiency? An aggregate frontier analysis

  • Pierre-Guillaume MéonEmail author
  • Laurent Weill
Article

Abstract.

We test the relationship between governance and macroeconomic technical efficiency on a sample of 62 countries, both developed and developing. We do so by applying Battese and Coelli (1995)’s method at the aggregate level. We find that better governance, measured by six complementary indices each devoted to a different dimension of governance, is always associated with greater efficiency. However, when governance variables are tested against each other, we observe that government efficiency is the aspect of governance that most robustly affects aggregate efficiency.

Keywords:

Governance macroeconomic efficiency frontiers income 

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Copyright information

© Springer-Verlag Berlin/Heidelberg 2005

Authors and Affiliations

  1. 1.DULBEA CP 140Université Libre de BruxellesBruxellesBelgium
  2. 2.Institut d’Etudes PolitiquesUniversité Robert SchumanStrasbourg CedexFrance

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