Political Stability, Corruption Control, Rule of Law, Voice and Accountability, and Per Capita Income Nexus in Arab Oil-Exporting Countries
DOI:
https://doi.org/10.26750/Vol(11).No(2).Paper6Keywords:
Political Stability, Corruption Control, Per Capita Income.Abstract
This panel data study examines the relationship between governance and economic growth in 11 Arab oil-exporting countries, over the period 1996 to 2019. Using various panel data instruments, normality tests, slope heterogeneity, panel cross-section dependence, second-generation unit root tests, and long-run cointegration between the variables. The novel method of moment quantile regression (MMQREG) was used for estimation purposes, and three diagnostic tests were used to check the initial estimations.
This exploration produces some interesting conclusions. First, all governance indicators positively all groups (but not those below the mid-income level) and the effect tends to be greater for better-off per capita income. Second, oil rent has a strong positive link to personal income growth, although it decreases as we move from low to high-income countries. Third, civil liberties have a positive and increasing impact on per capita income as we move from lower to upper quartiles. Since per capita growth swiftly responds to the rise and fall of governance predictors, specific policy adjustments are required to maintain sustainable and long-run per capita growth. The novelty of this is incorporating governance indicators and oil rents.
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