Maryam Al-Naser

BMA, College of Business and Finance, Manama, Bahrain

E-mail: 201220162@ahlia.edu.bh

ORCID 0000-0002-6038-8284

The impact of public governance on the economic growth: Evidence from gulf cooperation council countries

Allam Hamdan

Ahlia University,

Manama, Bahrain

E-mail: ahamdan@ahlia.edu.bh

ORCID 0000-0001-8578-2803

Abstract. This study aims to examine how public governance impacts and affects economic growth in the Gulf Cooperation Council (GCC) which was established on 25th May 1981 and is active till to date, and whether public governance indicators significantly influence the economic growth of these countries. The study’s sample includes the six GCC countries in the period of 1996-2019. The study model tests the effects of the independent variables of public governance which are the worldwide governance indicators on the dependent variables of economic growth which are the Gross Domestic Product (annual GDP growth in %), GDP per capita growth (annual in %) and GDP current US$) using a multiple regression model (the fixed effect approach). In this study, only four worldwide governance indicators were selected: the control of corruption, government effectiveness, regulatory quality, and the rule of law. Furthermore, this impact was examined using several control variables, including labor force, working capital, oil price, inflation rate, population, and Human Development Index. The data on dependent and independent variables was collected from the World Bank official website. It is found that the control of corruption and the rule of law have a positive, statistically insignificant impact on economic growth, moreover, government effectiveness and regulatory quality have positive, statistically significant impact on economic growth. The control variable’s results concern the labor force, working capital, oil price, inflation rate, population and Human Development Index explained further in the study.

Received: December, 2019

1st Revision: March, 2020

Accepted: April, 2021

DOI: 10.14254/2071-789X.2021/14-2/5

JEL Classification: D02, O17, P31

Keywords: public governance, economic growth, control of corruption, government effectiveness, regulatory quality, rule of law, gross domestic product, multiple regression model, fixed effect approach