Examine the Impact of Governance on Economic Development in South Asian Developing Countries

Abstract

The main goal of this study is to figure out how economic development and governance work together in Pakistan, India, Bangladesh, and Sri Lanka, which are most developing countries in South Asia. Panel ARDL/PMG, Kao Residual, and Panel Granger tests along with this diagnostic test are also used have all been applied for this analysis. The period considered is from 2000-2020, using annual secondary data.  Findings designate that long-term economic development is positively correlated with political stability, government effectiveness, gross capital formation (GCF), the labor force (LF), and FDI. Long-term economic growth is inversely correlated with corruption which suggests that corruption hampers economic growth. As a result, good governance is necessary for a nation's ability to prosper economically. Because of this, governments must come up with effective ways to encourage good governance, taking some of the things in this study into account.