Governance ındıcators and growth: a causality analysıs for developed and developıng G20 countrıes

Determining the relationship and direction between economic growth and governance indicators are\rimportant factors that shape the economic policies that countries will implement. In this study, the\rrelationship between economic growth and governance indicators of a total of 18 G20 countries, 9\rdeveloped and 9 developing countries, was analyzed with the causality test of Emirmahmutoğlu and\rKöse (2011). According to the results obtained from the study, the causality relationship between growth\rand governance indicators in terms of freedom of expression, government effectiveness and regulatory\rquality has been determined in developed countries. In developing countries, it has emerged that there\ris no causality relationship between growth and governance indicators for the entire panel. In addition,\rwhen examining the individual details of countries, it is seen that there is a causality relationship\rbetween economic growth and governance indicators.