The Role of Good Governance in Controlling Negative Effects of Economic Vulnerability on GDP in selected countries of OPEC

In recent years, strengthening the economy and its impact on economic performance has attracted the attention of a group of economic researchers.  On the other hand, for many years, economists have concluded that the quality of institutions and good governance can play important roles in the economic performance of countries. Since economic risks may affect the level of GDP significantly, this paper aims to examine the vulnerability effect of GDP in selected countries of OPEC. It also investigates the ability of good governance in reducing the negative effects of the vulnerability on the GDP. For this purpose, a dynamic panel data model is estimated using generalized method of moments (GMM) over the period 2002 to 2013. The results show that the vulnerability has negative and significant effect on GDP, and good governance can help the countries to reduce these negative effects and may play essential role in strengthening of such economies.