Determinants Affecting Governance in Response to Economic Development in the Developing Countries: Evidence from Pakistan

Abstract

The governance system of any country is required to be stable in any country. This study is the initial attempt to find the determinants of governance in Pakistan. The data has been collected from World Bank Data Bank from 2002-2016. The correlation test and Structural Equation Modeling is applied to the data. The governance is the construct variable in Structural Equation Modeling. The results shows that Voice and Accountability, Political Stability and Violence Terrorism, Government Effectiveness, Gross Domestic Product per Capital Growth, Gross National Index  growth. Gender diversity and Human Development are the factors of governance in Pakistan. It can be argued that Regulatory quality, Rule of Law and the control of corruptions are not the confirmed factors of governance the latent variable in Pakistan. I can say that Regulatory Quality is not important for the governance. The regulatory quality is not important factor for governance in Pakistan but Voice and accountability, Political stability and the government effectiveness are the confirmed factors for the governance.  The governance in Pakistan is poor but other determinants are of economic growth and developments are improving so this shows that if Policy makers want to improve the governance determinants then it will have positive effect on the economic development.