THE RELATIONSHIPS BETWEEN DOING BUSINESS, GOOD GOVERNANCE AND INCOME:A STATISTICAL ANALYSIS

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In this study, the relationships between doing business, good governance and income have been analyzed. One might expect that the ease of doing business, good governance and income are interlinked with each other. Using data on doing business, good governance and real income per capita published by the World Bank this expectation has been tested through test for correlation and one-way ANOVA and Kruskal-Wallis tests for group differences. It has been found that the countries with better business environment and high good governance scores have higher real incomes per capita. The study groups 185 countries on the basis of averages of the scores for good governance indicators and finds that governance and real income are correlated positively and significantly. However, the relationships between the two are even stronger for some sub-indicators, namely for government effectiveness and rule of law. As fort the relationship between doing business and good governance we find that business environment worsens as good governance weakens as expected. We conclude that both governance issues and worsening business environment result in decreases in real income.

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Doing Business , Good Governance , Real Income , ANOVA , Kruskal , Wallis

The International Journal Of Economic and Social Research

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The International Journal Of Economic and Social Research