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Does Governance Cause Growth? Evidence from China

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Author

  • Ross Wilson

Summary, in English

This study uses heterogeneous panel Granger causality tests to investigate the causal relationships between quality of governance and economic growth at the provincial level in China during the reform era. I find a significant and positive effect of economic growth on subsequent quality of governance, largely driven by growth in the secondary sector, but no significant effect of quality of governance on economic growth. These findings suggest that improvements in formal governance have not been a key factor in China’s rapid growth, and support the proposition that governance reforms are often a consequence, rather than a cause, of economic growth.

Publishing year

2015

Language

English

Publication/Series

Working Paper / Department of Economics, School of Economics and Management, Lund University

Issue

14

Document type

Working paper

Publisher

Department of Economics, Lund University

Topic

  • Economics

Keywords

  • Asia
  • China
  • Quality of Governance
  • Economic Growth

Status

Published