The Relationship Between Governance and Economic Growth During Times of Crisis

The current economic crisis has affected all aspects of life, resulting in political instability, personal financial troubles, and a growing number of business bankruptcies. Although these are serious issues, simply developing a government policy that injects an economy with money is not an appropriate means to achieve economic recovery and long-term economic development unless combined with an effective and efficient governing system. The present article examines whether the strong relationship between governance and growth exists during economic crises or only during non-crisis periods. The results of the current paper demonstrate that the global economic crisis has had an unnoticeable influence on the relationship between governance and economic growth. However, this study found that different levels of development of nations affect the relationship between governance and growth in various ways during times of crisis. Thus, the results of the current paper highlight the instability in the relationship between governance and economic growth during the economic crisis; this unsteadiness is a sign of the need for long-term strategies to promote global and national good governance practices that are not adversely affected by crises.