Investigating the Effect of Good Governance Quality on Agricultural Sector Growth

According to the viewpoint of institutionalist economists, by moving in the direction of improving the quality of governance, inclusive economic and political institutions are formed, leading to sustainable growth of various sectors of the economy and ultimately development. One of these key sectors is agriculture and food markets. Accordingly, the aim of this study is to investigate the effect of good governance quality on agricultural sector growth in selected developing countries during the period 1996-2016 by using the Bayesian Vector Autoregressive (BVAR). The study area includes the countries of the Economic Cooperation Organization (ECO), the Shanghai Cooperation Organization, the South American Common Market (Mercosur), the Economic Community of West African States (ECOWAS). Studies have shown that the growth of the agricultural sector is generally affected by good governance indicators in the long run and with varying intensity. In Iran, government effectiveness and quality of regulation are the most influential indicators of governance, and political stability and lack of violence, corruption control, rule of law, and critique and accountability are at a later stage.