ESTIMATING THE RELATIONSHIP BETWEEN GOVERNANCE, ECONOMIC GROWTH, INEQUALITY AND POVERTY
ESTIMATING THE RELATIONSHIP BETWEEN GOVERNANCE, ECONOMIC GROWTH, INEQUALITY AND POVERTY

Summary/Abstract: The main purpose of this paper is to estimate the relationship between governance, economic growth, inequality and poverty for 81 countries for the period 2000-2016. We divided the countries into three groups, low-income countries, lower-middle-income countries and upper-middle-income countries. To answer our research question, we use a structural model with simultaneous equations on Panel data. Our results show that the positive or negative impact of governance on the growth-inequality-poverty triangle changes depending on the dimension of governance taken into account and the sample being studied. Given the negative relationship between inequality and growth, democracy should a second time positively affect economic growth through the reduction of inequalities.

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