The Effect of Good Governance Indices on the Index of Global Economic Competitiveness: An Inter-country Analysis Approach

The impact of world economic competitiveness on the welfare of people and on economic development is undeniable. The present study examines the effect of good governance indicators on the global competitiveness index of the economy in selected countries of the MENA region. In order to achieve the research objectives, the statistical information related to the research variables during the period 2010-2017 was collected from the reports and database of the World Economic Forum and the World Bank. Then, the research model was estimated using the panel data econometric method and the fixed effects model. Research findings show that the impact of corruption control, rule of law, regulatory quality, and the government effectiveness indicators on the global competitiveness index is statistically significant at 5% level and have positive effect. The impact of protest and accountability and political stability indicators on the global economic competitiveness index is statistically significant at 10% level; these indicators have positive impact on the global competitiveness index of the economy. In addition, the impact of control variables such as innovation factors, efficiency factors, and essential requirements on the global competitiveness index of the economy is positive and statistically significant. Thus, in order to strengthen the global economic competitiveness of countries, the paper suggests following up and practicing the good governance indicators provided by the World Economic Forum, besides as well as other influential factors.