Good Governance Research Paper

3. Role of Good Governance

This brings us to a brief discussion on the relationships between good governance, economic growth and employment growth. Development economists generally identify good governance as one of the growth drivers along with capital accumulation, skilled labour force, the availability of resources, infrastructure and level of technology. There are several studies which relate the availability of growth drivers with actual achievement of economic growth in countries and regions. However there are very few studies which explain the role of good governance in employment growth and economic growth. The major reason is that it is difficult to define and measure good governance. The present paper is a small attempt in relating

The phrase ‘good governance’ includes several aspects including the role of government institutions. One possible reason why very few studies are made in this area may be difficulties involved in defining and measuring good governance. However, a few scholarly efforts have been made in this area of study12. Measuring the quality of governance in Indian States is a difficult and time consuming task. The present paper does not attempt to do this task. Instead we make use of the results obtained in earlier studies after making necessary

This is reflected in the differential economic growth achievements of different states of the country. Several socio-economic factors are involved in this process. One major growth driver which has attracted the attention of researchers in recent years is the quality of governance obtained in different states and its impact on economic growth outcomes. It will be of interest to know that extent to which differences in the quality of governance influence the regional employment outcomes. The correlation coefficient between index of quality of governance and state GDP is 0.413 and between index of quality of governance and employment growth is 0.525, which are moderately positive. It means states which display relatively higher degree of governance experience higher rates of employment growth. (See Table 3) In Table 4, economic growth and growth rate in employment of major states are given and Table 5 shows the index of quality of governance for major Indian states.

Table No 3: Correlation Between:

-Index of Quality of Governance and Economic Growth (for 16 major states)

-Index of Quality of Governance and Employment Growth (for 16 major states)

Index of Quality of Governance Economic Growth Employment Growth

Index of Quality of Governance Pearson Correlation 1 0.413 0.525 Sig. (2-tailed) 0.037 N 16 16 16

Economic Growth Pearson Correlation 0.413 1 ..269 Sig. (2-tailed)