GOOD GOVERNANCE AND ITS IMPACT ON

ECONOMIC DEVELOPMENT: A SYSTEMATIC

LITERATURE REVIEW
Marwa Khouya, Abdelhay Benabdelhadi

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Volume 1, Issue 1 (July, 2020), pp. 47-67.
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GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC

DEVELOPMENT:
A SYSTEMATIC LITERATURE REVIEW

Marwa Khouya (PhD Student)

Laboratory of Researches in Management and Organizational Sciences
National School of Business and Management
Ibn Tofail University, Kenitra, Morocco

Abdelhay Benabdelhadi (PhD professor)

Laboratory of Researches in Management and Organizational Sciences
National School of Business and Management
Ibn Tofail University, Kenitra, Morocco

Correspondence address: National School of Business and Management

Ibn Tofail University
Box.1420
Morocco (Kenitra)

Disclosure statement: Authors are not aware of any findings that might be
perceived as affecting the objectivity of this study.

Conflict of interest: The authors report no conflict interest

Cite this article: Khouya, M., Benabdelhadi, A. (2020). GOOD GOVERNANCE

AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW. International Journal
of Accounting, Finance, Auditing, Management and
Economics, 1(1), 47-67.

DOI: 10.5281/zenodo.3936217
Published online: 10 July 2020

Copyright © 2020 – IJAFAME

 Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC

DEVELOPMENT:
A SYSTEMATIC LITERATURE REVIEW

Abstract

Good governance is a polymorphous concept that stems from economic and political science.
It is used both in the context of the management of public action and in a strategic perspective
of economic development. In this article, we are first interested in deconstructing the various
contributions to define and reaffirm the role of "good governance" in development strategies.
What is "good governance"? How does it have an impact on a country's economy?
This paper addresses the issue of causality between good governance and economic
development, by examining the inter-connections between economic development and
governance indicators to increase transparency and efficiency. The purpose of this article is to
organize a systematic literature review in a scientific manner from data collection, through data
selection, reading and finally data analysis.
The impact of good Governance in economic development differs in political system structure,
governance current characteristics and contextual factors. Although outcome factors are
influenced by contextual determinants, the governance characteristics are of great importance.

Keywords: Good Governance, Economic Development, Public Governance, Governance Indicators, Growth.
JEL Classification: H00, F63
Paper type: Theoretical Research

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1. Introduction
Nowadays, the importance of the economic and social role of the Administration, in a context
of limited overall means and a continuously changing environment, calls for an appreciable
analysis as accurate as possible of the effects and impacts of the actions carried out by the public
authorities in the area of Good Governance on the economic development of the country. Good
governance implies a particular conception of the disclosure of the collective interests of the
stakeholders, the areas of public action and their coordination, with the aim of carrying out
effective and efficient public policies.
What is good governance? Public governance? What is its impact on the economy? The
academic literature on governance, which is increasing each year exponentially, provides a
plethora of definitions and connections. Indeed, the purpose of this paper is to introduce,
deconstruct, clarify and crossbreed the different ideas of the authors who have acquired
knowledge in this area.
Like most concepts in social, economic and political sciences, governance is not a new term.
In fact, the term governance was first used in France in the fourteenth century where it meant
“seat of government” The term became much more popular when the World Bank ‘reinvented’
governance in a World Bank Report of 1989. The use of the term governance by the World
Bank signaled a new approach to development that was based on the belief that economic
prosperity is not possible without a minimum level of rule-of-law and democracy. At the same
time, use of the seemingly apolitical term “governance” was valuable in preventing criticism
that the World Bank was trying to interfere in the political decisions made by debtor countries
(Bovaird & Loeffler, 2004).
The concept of governance has been discussed in political science and public administration
research for decades. Governance-broadly defined as the framework of rules, institutions, and
practices by which authority is exercises- is a key foundation of a well-functioning market
economy and a major ingredient to growth and equitable development (Al-Marhubi, 2004).
Indeed, governance can be addressed analytically by describing institutions as ‘the patterns
that emerge from the governing activities of social, political and administrative actors’ but also
by emphasizing processes meant for guiding, steering, controlling or managing sectors or facets
of societies (Kooiman, 2003).
The paper cannot and does not pretend to provide answers to all the questions, but instead
opens the way for discussion and clarification, by presenting a systemic literature review, and
exploring some of the many ways in which governance can impact the economy in general, and
economic development in particular.

2. Research Methodology
The key to doing research is through research. That is to mean that writing a scientific article
only starts with a scientific collection of references, which allows a scientific filtering based on
what is essential to read. As mentioned in the introduction, the purpose is to deconstruct the
subject of the research study. So, a part of this present paper aims to follow a scientific way to
choose the references, and to conduct a literature review that is firstly exploratory, and secondly
comprehensive in-depth literature review.
By the way, Systematic Literature Reviews are rapidly growing in importance in the social
sciences to aggregate findings across multiple empirical studies, a method which extensively
has been used in medical disciplines (Bilotta et al., 2014; Kampen and Tama´ s, 2013; Moore
et al., 2014). The first step in building up a literature review is to collect references, i.e. the
various works that have been conducted to identify the research subject. The effective method

49
 Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

is to search directly in scientific databases controlled, by keywords, which is generally the core
concept of the work "Governance".
Because of the surprisingly relative few numbers of references appearing in the searches, I
needed to make a modification. So I've added other terms to the main keyword, namely "good
governance", "public governance", "governance AND economic development". To filter my
references in function of my research requirements, and to appropriate it to the research issue.
This effective process has excluded for example research that has been made on corporate
governance, or environmental governance and has included only “public governance”
documents.

2.1 Exploratory systematic literature review

The exploratory systemic literature review is used to explore all of the references discovered,
in order to select the most pertinent references to read.
To do this, I have put all the references in my electronic library. I have chosen Zotero as my
reference management software, which allowed me to collect all the documents in an organized
way.
In addition, I opted for Zotero because it is free, and open source, and I did a doctoral course
on its handling and manipulation. It enables to manage, easily and simply, bibliographic data
and research documents.
In this sense, I have filled the metadata for each scientific paper, so I have mentioned the
author, the year, the name of the database in which I founded the document, the name of the
journal concerning the articles. And the abstract of each one.

Table 1 : References by type

Type Number of documents

Conference paper 5
Thesis 8
Book 26
Book chapter 27
Journal article 226
Total 292
Source: Author’s processing.

My collected references include (Tab.1) a few theses to understand the structure of writing
a scientific manuscript, a few books that treat governance in a detailed way, a few chapters
including the contribution of authors among others who collaborate in a shared book. And a
wide range of scientific articles (just five from conferences) the rest are journal articles, which
is particularly the basis for this paper.
Afterwards, I downloaded my entire library and transferred it to the Nvivo1 software to
proceed with the textual analysis, at the first stage this analysis only concerns the abstracts of
each single document.

2.1.1 Word cloud

After transferring all the bibliographical documents into the Nvivo software, I proceeded to
the textual analysis of abstracts of each element in my library. The textual analysis of abstracts

1
NVivo is a qualitative data analysis (QDA) computer software package produced by QSR International. It
allows researchers to organize, analyze and find insights in unstructured.

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reveals primarily which words are the most frequent and repeated. This indicates the interest of
the concept in each document. The word "Governance" is the most frequent word in our
analysis (Fig.1) it was found 1191 times in all the abstracts of the collected references.

Figure 1: Word Cloud of the Exploratory systemic literature review

Source: Author’s processing.

The closest words to the term "governance" (Fig.1) are those that appear next to that term in
the abstracts of the references. And then the large words are more frequently repeated than the
others. What is interesting to know are the big words appearing next to "Governance"; this word
cloud makes it scientifically possible to identify in which reference the key words of the search
appear the most.

2.1.2 Analysis of Exploratory Review Data

It is noticeable that the word "governance" is the largest in the above word cloud, although
it is the most frequent in all the references collected.

Table 2: Most frequent words in the abstracts

Words Frequency
Governance 1191
Pubic 483
Good 227
Development 203
Economic 188
Countries 171
Government 169
Research 160
Policy 160
Political 154

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 Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

Article 123
Management 117
Source: Author’s processing.

The first 5 words (Tab.2), namely "governance", "public", "good", "development" and
"economic" are the most cited in all the summaries treated, which gives them the character of
an important element for filtering the reference documents in the selection process.
As a matter of fact, this study draws upon an analysis of the literature from the perspective
of an extended systematic literature review. Relevant studies were searched for in seven various
sources: Scopus, Web of Science, Science Direct, Springer, ProQuest, Jstor and Google Scholar
(Tab.3).
Table 3: The references collected by source

Sources References in %
Scopus 42,61%
Web of Science 27,83%
Science Direct 21,30%
Jstor 3,04%
Springer 3,47%
ProQuest 1,30%
Google Scholar 0,43%

Source: Author’s processing.

Some references were collected directly from editors of scientific journals, and others
through databases and scientific search motors. Almost half (42.61%) of the studies originated
from the Scopus source, followed by Web of Science and Science Direct, mainly due to their
indexing of many journals that publish work on good public governance. Springer was
especially the source for books and book chapters in this field, and ProQuest for the thesis. On
Jstor only 3.04% of the documents have been downloaded because the subscription of the
institution is thematic, delineating different transdisciplinary approaches, i.e. documents in
management or economics. Indeed, Google Scholar has allowed me to find two articles of
which only the abstract was available on the other sources.
The library of scientific articles is very rich and even diversified, it includes all the work
published from the 1990s until 2020, and represents a portal towards 30 years of research in the
field of public governance (Fig.2).

Figure 2: The references collected by year of publication

Source: Author’s processing.

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This justifies the fact that this topic is long-standing but still topical and inspires many
authors to contribute to the development of knowledge in this area.
Nevertheless, it is important to read the most recent work to know the latest conclusions of
the work that has been produced by the authors. This is why the papers of the last two years
(Current year and 2019s, 2018s) are the most voluminous (Fig.2), it enables us to visualize and
update the development of knowledge in this field.
In addition, and as notified above (Tab.1) 226 of the references are journal articles, so the
questions that arises is, where are these articles published? Are there journals dedicated
simultaneously on the same line of research? Effectively, the articles collected were published
mainly in the journal "Governance", followed by "World Development", "Public Policy and
Administration" and other journals presented in the graph below2 (Fig.3)

Figure 3 : Main journals of corresponding papers

Governance
World Development
Public Policy and Administration
Land Use Policy
Public Management Review
The Journal of Politics
The European Journal of Development Research
International Journal of Project Management
Safety Science
International Journal of Public Administration
Economic Modelling
Source: Author’s processing.

So, 32 selected articles were published in the journal of "Governance", 12 articles in "World
Development" 12 in "Public Policy and Administration". Other papers were also recognized by
the selection including 8 articles in each of "Land Use Policy" and "Public Management
Review". And many other journals in which I have found important articles on the subject,
listed with details of the number of articles for each one (Appendix 1).

2
Only the journals with at least 2 articles were mentioned in the result.

53
 Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

2.2 Extended systemic literature review

From the established word cloud, I was able to identify where exactly each keyword appears,
in which reference, and how many times. Even more, I was also able to identify where 4 or 5
or all the principal keywords appear together. Through this method I decided my references to
be carefully read.
From the exploratory systemic literature review, I was able to select the most important
references from different scientific databases, saved in my Zotero Library.
The academic literature on governance, good governance and sustainable development
governance has grown rapidly. However, apart from the universal acceptance of its importance,
differences prevail in respect of theoretical formulations, policy prescriptions and
conceptualization of the subject itself and no one can claim ownership of the Governance
however modern theories have expanded the connotation, focusing on a large variety of
instruments designed to alter and channel the behavior of individual and collective actors
(Loorbach, 2007; Pierre and Peters, 2000; Adger and Jordan, 2009; Kardos, 2012).
According to The World Bank governance work of Kaufmann, Kraay and Mastruzzi (2006)
operates a set of aggregate governance indicators based on: access to voice and accountability;
lack of political instability and violence; minimum government effectiveness; existing
regulatory burden, the rule of law, concrete and visible efforts to eliminate bribery and
corruption. (Daniel Kaufmann et al., 2009).

3. Findings and Discussion

Through the textual analysis of the full texts, a condensed template was developed through
which the synthesis table was produced. The systematic literature review involves analyzing
the selected documents in which the most frequent words in the abstracts appear. Either together
or a minimum of 3 key words listed in (Tab.2).
The literature review allows us to situate our subject in relation with economic development.

Table 4 : Synthetic table of bibliographical references

Author
/Year Country Problematic Method Main Findings
/Journal

How can -The independence of

developing An extensive meritocratic bureaucracies and
countries boost analysis of judicial systems and the
their economic specific transparency of elections are
growth rates by governance worthy goals in themselves. This
introducing "good reforms and its does not necessarily have to give
A.Goldsmith,
governance" economic a noticeable boost to
A (2007) United
measures? This turnarounds development.
Governance Kingdom
paper examines Country case -Good governance reforms are
this issue from the studies: United more effective than the cause of
perspective of States, Argentina, accelerated development per se,
international Mauritius and but over time they will be an
development Jamaica. important factor in sustaining
agencies. development.

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Application the
method Technique
for Order
Preference by
Similarity to Ideal -The countries that have been
Solution successful in this area in the
The evaluation of (TOPSIS). The long-term, in particular, are the
Ardielli,E Good Governance original data used Nordic countries: Finland,
(2019) development in in the research Sweden and Denmark.
Czech
Review of the European were the values of -On the contrary, there are
Republic
Economic Union countries in Worldwide countries that show greater
Perspectives the long-term. Governance shortcomings in terms of Good
Indicators Governance as Romania,
monitored and Bulgaria and Greece.
processed by the
World Bank. (In
the period 2007–
2017)
- The privatization did not have
a significant impact on both
income inequality and economic
growth.
Adams,S. The study Application of the
- Good governance had a
Mengistu,B examined the Least Squares
positive impact on economic
(2009) impact of Dummy Variable
growth and a negative impact on
Journal of United privatization on (LSDV) approach.
Developing
income inequality.
Kingdom economic growth In 82 developing
Societies - Foreign direct investment
and income countries between
(FDI) had a positive effect on
inequality. 1991 and 2002.
income inequality, but a
negligible impact on economic
growth.

- The literature review

demonstrated successfully the
existence of the causal
relationship between
The article governance and economic
- The application
studied whether growth, but not much is reported
of Correlations
AlBassam, the strong on the influence of the economic
was conducted
Bassam A relationship crisis on this connection.
between GDP and
(2013) between - A country's level of
each indicator of
European Saudi governance and development influences the
the six governance
Journal of Arabia growth exists effect of the economic crisis on
Sustainable indicators for all
during economic the governance-growth
Development countries using
crises or only relationship.
data from 2006 to
during non-crisis - As a result, countries at
2011.
periods. different levels of development
have different requirements,
they must improve governance
and strengthen economic growth
in times of crisis.

55
Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

- Public disclosure is an
indispensable part of
transparency, which is a key to
good governance (Disclosure of
assets and income of candidates
Kaufmann, D
for public office, civil servants,
(2005)
politicians and legislators,
Finance &
Development judges and their dependents,
individual and corporate
contributions to political
campaigns, campaign expenses,
-Analyzing the parliamentary votes, bills and
data that suggest parliamentary debates, budgets
that transparency and public meetings.)
Identification of
helps improve - Effective implementation of
the different
governance and conflict of interest laws,
"myths" that
reduce corruption, separating business, politics,
USA prevail over
essential legislation and public service,
governance and
ingredients for and adoption of a law governing
corruption.
better lobbying, and the punishment of
development and institutions found guilty of
economic growth. corruption in public
procurements.
- The right of access to
information and freedom of all
types of media is also a myth that
prevail over governance and
corruption.
- Ensuring the diagnosis of
governance and the anti-
corruption process in order to
implement transparency
programs at the local level.
Distinction
between The
- All the governance indicators
Worldwide
contain a measurement error.
Governance
But each indicator can reduce
Indicators. Those
Kaufmann, Method of the influence of measurement
that measure
D. and measurement error error individually, by
formal rules and
Kraay,A. in the assessments combining, organizing and
those that measure
(2008) of the summarizing information from
the practical
Munich USA organizations, and different sources.
application of
Personal of The Worldwide - The Worldwide Governance
those rules. What
RePEc Governance Indicators (WGI) are aggregated
Archive are the strengths
Indicators indicators from a variety of
and weaknesses of
sources, which combine
the two types of
information from a wide range
indicators and the
of sources.
complementarities
between them?
Al Mamun, The natural
Exploring the link - In countries with higher
M et al. logarithm of GDP
between economic globalization, QOG
(2017) per capita
Australia economic growth has a positive and significant
Economic (LGDPC) is used
and resources. effect on economic growth.
Modelling as a measure of

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Does resource economic growth. - Currently the ICTDIF is an

abundance The main emerging catalyst that influence
facilitate or independent significantly the status of
impede economic variables are the essential goods and services and
growth? natural logarithm economic decision-making
of oil rent per regarding the link between
capita (NORENT) essential goods and services and
and the economic growth.
governance
quality index
(GQI).
This article
examined the
preconditions for - Finland and New Zealand are
the method
developing countries with essentially
employed is
countries to evolutionary anti-corruption
benchmarking
benefit from the development path.
between three
experiences of the - Successful Western countries
success stories of
world's least have important similarities
good governance,
corrupt nations concerning the role of
Anttiroiko, those
and their democracy, local culture,
A-V. (2017) in Finland, New
development political leadership and
International Zealand and
Finland paths. administrative machinery in
Journal of Singapore, and
How to establish anti-corruption policy, which are
Public Policy their ability to
strong anti- embedded in their evolutionary
serve as reference
corruption policy development paths. Singapore is
or models for
models that among top performers in Asia
developing
consider culture, because it puts special emphasis
countries seeking
democracy, on its political leadership and
to eradicate
political anti-corruption agency in
corruption.
leadership and eradicating corruption.
administrative
apparatus?
The method
consists of testing
the following
hypothesis: the - Highly significant exogenous
richest countries and historically predetermined
Drawing on
should enjoy variables: countries with a
insights from
better governance, history of Western European
economic,
Al-Marhubi, using the influence and with origins in
political, and
F (2004) logarithm of real British common law have better
cultural theories
Contemporary Sultanate Gross Domestic governance.
of governance,
Economic Of Oman Product (GDP) per - Economic factors have a
this article
Policy capita in 1960 as significant impact on
investigates the
an overall measure governance: such as openness to
determinants of
of economic trade, level of economic
governance.
development. development and resource
This analysis is intensity of exports.
based on cross-
national data from
86 countries.

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Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

- The development and good

governance initiatives of the
state in the scheduled areas in
The article India have only contributed to
This article
interrogates the further deprivation and
highlights the
politics of control alienation of the local
contradictions
and management communities.
between the
of natural -The issue of the territories
governance
resources through affected by Maoist violence
mechanisms and
governance must be managed through a
development
Behera, A mechanisms and system of governance that
measures towards
(2019) development crushes the systematic
the constitutional
Studies in India initiatives. And deprivation of natural resources.
provisions related
Indian Politics identifies the - The development and good
to the autonomy
commonalities governance initiatives must be
of local
between the state based on the local needs rather
communities in
and the Maoists in than what is being decided from
the scheduled
terms of their outside.
areas (SA) of
control over the - The article affirms that the
central and eastern
local state-led initiatives and the
India.
communities. Maoist movement are both
instruments in sustaining the
conflict and alienation of the
local communities.
This paper studied - The implications of public
several administration have an
fundamental important impact on the socio-
The empirical
credentials of economic dimensions.
analysis is based
good governance - Public administration
on data covering
and public expenditure (especially support
the 1995–2017
Noja, G-G. administration in for the environment), has
lapse of time,
(2019) relation with positive and significate
processed through
International economic implications for the EU
three econometric
Journal of development, but economies, leading to a
Romania procedures,
Environmental also poverty, significant increase in per capita
namely robust
Research and research, and GDP and a reduction in the risk
Public Health regression,
development of poverty.
structural equation
support, as - The quality of governance in
modeling, and
representative EU countries requires an
Gaussian
socio-economic additional effort to build on good
graphical models.
credentials in the public governance to support
European Union long-term economic
(EU) countries. development.
How to classify The method - Interdependent links between
the different carried out is the the nature of policies and
reforms to achieve analysis of the institutional arrangements and
good governance? good governance growth or poverty reduction.
This article has agenda which is - Corruption and instability
Grindle, M-S
mainly addressed based on the hamper development. Therefore,
(2004)
USA the issue of points mentioned anti-corruption has to be
Governance
prioritizing good in the World prioritized as a reform towards
governance Development good governance.
reforms to Reports: - The structural disappearance of
promote Characteristics of the adjustment policies
economic good governance, promoted by the International

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development and Institutions for Monetary Fund and the World

reduce poverty. good governance, Bank in the 1980s and 1990s has
Specific laws, contributed to the recognition
Specific policies, that good governance is a key
Specific services, strategy for reducing poverty.
General strategies - It is important to set priorities
to achieve, according to factors based on the
Specific characteristics of the country
objectives. and public administrations,
hierarchies of reform activities,
effectiveness and capacity for
policy impact, while
distinguishing between short-
and long-term objectives.
- Exchange rate flexibility is
Analysis of the important for explaining the
relationship To resolve the economic growth, it
between problematic, the significantly destabilizes
governance and authors carried out emerging markets, and
economic growth, GMM regressions accelerates economic growth in
focusing on the on panel data to developed countries.
role of the overcome - In emerging countries,
exchange rate problems of exchange rate flexibility requires
Hadj, S. et al.
regime. heteroskedasticity, good governance, which in turn
(2018)
Theoretically, autocorrelation encourages the choice of a more
International Tunisia
good governance and homogeneity. flexible regime, with the aim of
Economics
stimulates The panel covers stimulating economic growth.
economic growth, the period 1996- - For developed countries, good
but recently, some 2012 and includes governance accelerates
countries with 50 countries (21 economic growth if the
weak governance developed and 29 exchange rate regime is not too
are experiencing emerging flexible and exchange rate
significant countries). flexibility enhances economic
economic growth. activity if governance is not of
good quality.
- People are engaged in a relative
way in a struggle to determine
the degree to which the tax is
applied, whether they are rich or
Since the payment poor.
of taxes owed - An efficient and transparent tax
Epstein, G-S. The methods used
differs between administration policy is an
Gang, I-N. in this work :
rich and poor, this obligation to achieving good
(2019) Relative efforts,
paper explains governance. But it must
International winning
Germany how tax evasion definitely be adequate to the
Tax and probabilities, and
and inequality can requirements of society.
Public the proposed
limit the capacity - In order to achieve the highest
Finance enforcement level.
for economic global level of good governance,
development. the Tax Administrator (TA)
must make clear choices in the
search for the mechanism over
the whole range of tax
administration instruments.

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Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

The approach is to
establish a new
institutional
approach to - Public institutions of
research and governance significantly
analysis of the influence the good governance
Why do some fundamental and poverty reduction situation
countries and their institutional issues in Tanzania, which in turn
systems of of the influences development
governance fail contemporary outcomes.
while others system of public - The functions of the
Mgonja, succeed? What is governance in institutions considered
B. E. S. (2010) wrong with Tanzania. To important for the achievement of
Canada
University of development study the good governance development
Alberta initiatives in relationship objectives have become much
Africa? between public simpler in Tanzania.
This manuscript institutions and - A dysfunction in the
concern the case governance in institutional mechanisms has a
of Tanzania local political straightforward impact on the
contexts in order system of public governance.
to analyze the This is another perspective on
impacts of good governance.
institutional
factors on good
governance.
- Sustainable Development
Strategies necessitate concern
for and involvement of the
-Using as
various vertical coordination
methodology the
mechanisms.
Kardos, M thematic content
The Reflection of - Vertical coordination consists
(2012) analysis, on how
Good Governance of disseminating good practices
Procedia - good governance
Romania in Sustainable of the public consultation
Social and is reflected in EU
Development process in order to bring
Behavioral countries
Strategies development strategies closer to
Sciences sustainable
the people.
development
- These strategies can be
strategies
portrayed as a change in their
behavior to one that is
increasingly sustainable.
-The results revealed that
Overview of the economic governance is
findings that show measured by economic freedom,
that Africa as a political governance is measured
Kwasi Fosu, The chapter region, since about by the Electoral
A provided an the end of the Competitiveness Index, and
(2017) account of the role 1990s, has executive constraint is measured
Rethinking
USA of governance in significantly by political stability indicators.
Governance
Africa’s economic improved per - Negative implications for the
and
Development
development. capita income, the allocation of fiscal resources
level of human lead to a likely disequilibrium
development and between the economy and
reduced poverty. politics.

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-Improving the quality of local

governance is necessary, as well
as promoting human capital
This article accumulation to simulate the
reviewed the panel sustainable development of the
data in the Chinese economy.
provincial regions - The quality of governance has
This paper in China over the a positive effect on economic
investigated the period 2001-2015. growth, because good
Liu, J et al. impact of Methodology: governance significantly
(2018) governance Build a new strengthens the "outstretched
China
Economies quality on comprehensive hand" or significantly weakens
economic growth index of the "outstretched hand" of
in China. provincial power.
governance, with - In the Eastern region, better
verification of the governance brings good quality
robustness of the economic development, contrary
empirical results. to the Western region where
better governance brings rapid
economic growth but no
development.
- Political and institutional
governance contributes
Good economic,
positively to sustainable
political, and
development, there are
institutional
reciprocal links between human
governance are
The effectiveness development and economic
Omri, A. considered as
of good growth, which means that they
Ben conditional
governance in are interlinked and can very well
Mabrouk, N. variables, which
rebalancing the complement each other.
(2020) Saudi allow rebalancing
economic, - The paper enhances that
Arabia, these three
environmental, political and institutional
Environmental And components in the
and social governance enables MENA
Impact Tunisia case of 20 selected
components of governments to moderate the
Assessment MENA economies
Review sustainable negative impacts of carbon
for the period
development. emissions on economic growth
1996–2014. Using
and human development and
simultaneous-
also the positive impact of
equation modeling
economic growth on emissions
approach.
growth, and hence on
sustainable development.
The governance An empirical
-The Commission continues to
architecture has study of Overview
play a leading role in the
undergone of changes in
economic governance of the EU,
Bauer, M-W. changes in the Commission's role
but it is constantly changing.
Becker, S European Union in economic
- Its authority to set the agenda is
(2014) (EU), particularly governance. four
diminishing, as most economic
Journal of with regard to the areas that have
Germany governance decisions depend on
European function of the undergone the
the Commission to make them
Integration European most important
work. This finding qualifies the
Commission changes: support
degree of intergovernmentalism
regarding the for financial
in economic governance.
institutional stability,

61
 Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

reforms and their economic policy

consequences. surveillance,
coordination of
national policies
and supervision of
the financial
sector.

- Empirical results highlight that

"free" countries show no
significant causality ranging
from most dimensions of
In order to governance to economic growth,
determine a except the case of South Korea.
Granger causality Concerning the "partially free"
ranging from countries, with the exception of
Huang, C-J governance to Indonesia and Thailand, Granger
Ho, Y-H economic growth, rule of law is at the origin of
(2017) The impact of this paper used a economic growth.
The North good governance frequency-domain - Regarding "non-free"
American Taiwan on economic approach existing countries, a significant causality
Journal of growth in Asia. in twelve Asian is inferred, ranging from most
Economics countries, dimensions of governance,
and Finance classified as particularly for government
"free", "partly effectiveness and the rule of law,
free" and "non- to economic growth.
free", over the - Particular attention should be
period 1996-2014. accorded to effective
government and the rule of law
for "non "free" countries. This
implies growth in Real per capita
GDP.
Source : Author’s processing.

The processes of good governance must include participation by the important stake holders
in the decision making. The processes need to emphasize decentralization of power structure
and participation in decision making (Kaufmann et al., 2004).
The study of good governance can be focused of the broad-based stake- holders and using
its financial, natural, and human resources in the interests of all people, and on the basis of the
principles of justice, fairness, equity, efficiency, transparency, and accountability (Farazmand,
2020). Also, one of the major elements of good governance is decentralization of
administration. ‘‘Decentralization can contribute to improved performance of local
government; it can provide new opportunities for responsiveness to local needs; it can mean
that if governance improves citizens may hold public officials and agencies more accountable.
Decentralization is not a linear or consistent process, and it can suffer reverses as often as
advances in terms of how local governments and citizens take up its challenges”(Grindle, 2007).
Another way adopted by Mgonja, B. E. S.(2010) , to analyze good governance of public systems
in Tanzania is the functioning of institutional mechanisms. this study revealed the importance

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of public institutions, and their role considered necessary for the achievement of development
goals.
However, governance research developed into a more mature paradigm based on conceptual
clarity, a broad range of shared theories and methods, and empirical investigation both of the
scope conditions and the societal impacts of governance processes based on multi-actor
collaboration(Ansell & Torfing, 2016; Sørensen & Torfing, 2018)
Good governance is operationally defined by the various indicators on available data based
on the UN statistics. For this research, good (bad) governance is measured by an index based
on available data. The index includes: Lower Political Rights, Lower Civil Liberties, Corruption
Perception Index, Satisfaction with Life Index, Global Gender Gap Index, Lower Political Risk
Index, Human Development Index, Gini Index, Lower Education Attainment Level (Jamil et
al., 2013). It also combines hands-off tools such as institutional design and political, juridical
and discursive framing with hands-on tools such as process management, direct participation
and conversation (Bell & Hindmoor, 2009)
The first generations of governance research not only helped to clarify the concept of
governance (Kooiman, 2003) but also provided a thorough understanding of how interactive
forms of governance contribute to advancing the effectiveness and democratic quality of
modern governance (Sørensen & Torfing, 2018). Concerning Al Mamun et al. (2017) who
considered that the linkage between resources and economic growth is an unresolved empirical
puzzle with major opposing strands toward the quality of governance.
In this frame of literature review, it is debatable whether how good governance practices
lead to economic growth or to economic development. Among the works that focused on this
issue of public governance in economic development Kaufmann et al. (2004) claimed that
governance quality and economic growth are positively related. In their evaluation of the
worldwide governance indicators (WGI) from 1996 to 2002, they found that “per capita
incomes and the quality of governance are strongly positively correlated across countries”
On the one hand, there is a multitude of works (Anttiroiko, 2017; Epstein & Gang, 2019;
Goldsmith, 2007; Grindle, 2007; Daniel Kaufmann, 2005) that have opted for corruption and
the effort made by the State to control and reduce corruption as an explicative variable to
conduct the study in terms of good governance, to subsequently generate it on the economic
aspect.
In the other hand a very important question is about the interdependence of Good
Governance and socio-economic development (Haldenwang, 2004 and Agere, 2000).
Governance im-provement and country development are considered to be related issues. Many
authors discuss the relationship of the implementation of governance reforms and rapid
economic and social development. (Ardielli, 2019).
Noja et al. (2019) concluded that an overview of the implications of public administration
for the economy and development is significant in analyzing the relationship between good
public governance and sustainable economic development. As AlBassam (2013) argued, some
explanatory variables could contribute more than others to the analysis of the impact of good
governance on economic growth. For example, a country's type of political system could
influence how the economic crisis shapes the relationship between governance and growth in
that country. Kwon & Kim (2014) determined a causal link between good governance and
poverty reduction, out of the six WGIs tested, and the empirical evidence does not support the
hypothesis that good governance leads to poverty reduction. In contrast to Grindle, (2004) that
shows that the good governance has become a paramount strategy for reducing poverty,
following the structural disappearance of the adjustment policies, promoted by the IMF and the
World Bank in the 1980s and 1990s.

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 Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

As for Kwasi Fosu (2014), he developed economic governance philosophy as a result of its
intersecting research between good governance and economics in his book of Rethinking
Governance and Development, he concluded that the economic governance measured by
economic freedom and political governance by the index of electoral competiveness, and
executive constraint and by indicators of political stability (2017). In Addition, Bauer & Becker
(2014) analyzed the economic governance, they focused on supranational executive's role in
the four areas of European Commission that have witnessed the most important changes:
financial stability support, economic policy surveillance, coordination of national polices and
supervision of the financial sector.
By that reasoning, to measure economic growth, GDP is generally employed, and to study
the impact of good governance, one or more aggregate governance indicators are used.
Nevertheless, the results of this study indicate that policymakers in countries should choose to
pay more attention to the quality of governance, particularly with regard to government
effectiveness and the rule of law, in order to promote the future growth rate of real GDP per
capita (Huang & Ho, 2017).
The relationship between the quality of governance and the economy demonstrates that
governance quality has a positive effect on economic development (Anttiroiko, 2017; Liu et al.,
2018) i.e. that good governance presents diminishing marginal returns, which means that the
high-speed economic growth effect becomes less and less, . i.e. while the high-quality economic
development effect becomes more and more, At least in the developed countries, such are the
cases studied in China, New Zealand, Finland and Singapore.
Likewise, Adams & Mengistu (2008) found that good governance had a positive impact on
economic growth and a negative impact on income inequality in their work in 82 developing
countries. Omri & Ben Mabrouk (2020) were concerned with economic development, but in its
sustainable aspect. But they also deduced that political and institutional governance - which are
part of good public governance - contribute positively to the components of sustainable
development. Through this research, we understand that there are reciprocal links between
human development and economic growth, and that one impacts the other.
It turns out that during economic crises, most governments focus more on economic growth
than on governance development (Daniel Kaufmann et al., 2009). It must also be affirmed that
in order to successfully carry out public strategies in terms of governance, development and
good governance initiatives must first be based on the local needs of the country.
According to the requirements of its population and economy rather than on what is decided
from outside, for example, on the case of the study in India (Behera, 2019).
Altogether, several academic research studies have examined the relationship between good
public governance and the economy of a country, which can be classified according to the
impact on economic growth, economic development, or the economic regulatory and legal
framework.
Furthermore, this theoretical paper studied the contribution of governance on economic
development. It is part of the normative theory of the public economy which is interested in
market failure. The economic development emphasizes the importance of the distributive and
corrective role of the state in dealing with the imperfections and externalities engendered by
irresponsible behavior fueled by the feeling of not being afraid of penalties.(Hadj Fraj et al.,
2018)

4. Conclusion
The research study was selected according to a two-step procedure. First, the search results
were filtered by title and then by abstract (Exploratory Systematic Literature Review), and then

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reduced according to strict inclusion and exclusion criteria. Those excluded were references to
studies that were a title and an abstract far from the subject matter. The other studies were
selected for a full text search (Extended Systematic Literature Review) They were thoroughly
read and understood.
This paper has revealed through an extended systemic literature review that good governance
is a prerequisite for economic development, by cross-referencing the ideas of different authors,
multitudes of works, and even incompatible results. This is because of the territory and time in
which the studies were conducted.
Each country has its specific characteristics, its political history, and its own public
management process. In the final part of the document, the study examined that Good
governance in public area is pivotal to contemporary national of economic development
strategy, it contributes to long-term strategic policy objectives and involvement, to the
coherence of policies through vertical and horizontal coordination.
Consequently, good governance is an open and transparent process that carries out the
involvement, integration and accountability of stakeholders and brings economic development
strategies closer together. The results of the study suggest that particular country characteristics
may be more important in promoting growth than any economic policy in itself. This and other
important issues may be subject for future research.
Finally, in the hope that this work will open the search for more productive research in the
intersection of the disciplines of public management and economics, which is a potentially
fruitful area of scientific research.

Appendices
Appendix 1: List of principal journals

Principal journals Number of corresponding sources

Governance 32
World Development 12
Public Policy and Administration 12
Land Use Policy 8
Public Management Review 8
The Journal of Politics 6
The European Journal of Development Research 6
International Journal of Project Management 4
Safety Science 4
International Journal of Public Administration 4
Economic Modelling 4
Journal of Comparative Economics 4
Technological Forecasting and Social Change 4
Annual Review of Political Science 4
Journal of Environmental Management 4
International Journal of Disaster Risk Reduction 2
Procedia technology 2
The Social Science Journal 2
The Journal of Strategic Information Systems 2
European Journal of Law and Economics 2
Asian Journal of Business Ethics 2
Group Decision and Negotiation 2
European Union Politics 2
Biopolymers 2

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 Marwa Khouya, Abdelhay Benabdelhadi. GOOD GOVERNANCE AND ITS IMPACT ON ECONOMIC DEVELOPMENT: A
SYSTEMATIC LITERATURE REVIEW.

International Journal of Public Sector Management 2

Organization Studies 2
Academy of Management Journal 2
Energy Exploration & Exploitation 2
International Economics 2
The North American Journal of Economics and Finance 2
Journal of Developing Societies 2
Comparative Economic Studies 2
Journal of Economic Issues 2
Economies 2
African Development Review 2
Studies In Comparative International Development 2
Journal of Business Ethics 2
Kyklos 2
The British Accounting Review 2
Urban Forum 2
Knowledge and Policy 2
Evaluation and Program Planning 2
Development and Change 2
Journal of Accounting Literature 2
Global Environmental Change 2
Hague Journal on the Rule of Law 2
The World Bank Research Observer 2
The World Bank Economic Review 2
Finance and Development 2

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