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The relationship between governance and economic growth

Author: 
Sied Muhumed Jibril
Subject Area: 
Social Sciences and Humanities
Abstract: 

Using time serious data of forty Ethiopia spanning over 15 years this paper analyzes the relationship between governance and economic growth in Ethiopia. The descriptive result showed that the country achieved mixed result some dimension of governance improved while the other deteriorated like freedom of press and freedom of expression. In general the country performance showed it is below the African average. Moreover, consistent with most recent empirical works, the study found that good governance has significant direct impact on growth over the time under consideration. It was found that improvement in good governance has highly significant effect on the growth. Similarly, labor force growth is also significant positive effect on the recent growth. While the other variables like government education expenditure, openness and foreign direct investment were found to have no statistically significant effect on economic growth in Ethiopia. Thus, the government has to improve the governance at all dimension to benefited out of it.

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