Estimating the Effect of Economic shocks on Governance

Mercredi | 2015-01-14
salle B103, 12h-14h


Empirical evidence suggests that economic downturn is a key driver of the improvement in governance quality. This paper uses the commodity exports price growth rate, the net barter terms of trade and the exports growth rate to identify the effect of economic upturnon various aspects of governance. We find that positive economic shocks induce better governance. Moreover, our results suggest that governance quality depends on the type of shocks that prevail in the economy.