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Financial Crisis and Governance in Developing Countries: Socio-economic Issues and Perspectives

Author

Listed:
  • Ali Benabdennour

    (Lab. of Prospective, Strategy and Sustainable Development, University of Tunis El Manar-TUNISIA)

  • Malek El Weriemmi

    (Research Unit of Economy, Environment and Enterprise, University of Gabes- TUNISIA)

  • El Moustapha Ould Sidi Mohamed

    (Mauritanian Center for Policy Analysis, Ilot D, N¡ã 93, Nouakchott-MAURITANIA)

Abstract

The economic crisis had diverse socio-economic effects, particularly in developing countries. Added to the bad political and economic governance, these effects have made the social climate very fragile. So, in several countries, this situation has caused major social movements which have changed the political regime in some cases (Tunisia, Egypt, Libya and Yemen). Through these movements, these societies aim to establish law-governed states. Theoretically, under good governance development should flourish. In this paper, we analyze the socioeconomic effects of the crisis in several regions of developing countries. Then, we present a review of literature on governance and development. The last section is devoted to an empirical study using panel data. The empirical study covers a sample of 51 developing countries during the period 1980-2009 (yearly data, T=30). The main results show that the contribution of good governance to growth is significantly positive. Moreover, it seems that institutions that promote political and civil freedom enhance the contribution of Foreign Direct Investment (FDI) to growth. However, it is important to mention that these contributions are conditioned by the social endowment of human capital. The last seems to help to benefit, especially in the revolutionary new countries, from the new growth opportunities.

Suggested Citation

  • Ali Benabdennour & Malek El Weriemmi & El Moustapha Ould Sidi Mohamed, 2012. "Financial Crisis and Governance in Developing Countries: Socio-economic Issues and Perspectives," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 71-84, November.
    • Handle: RePEc:bap:journl:120407
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    References listed on IDEAS

    as
    1. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    2. Khanna, Gaurav & Newhouse, David & Paci, Pierella, 2010. "Fewer Jobs or Smaller Paychecks? Labor Market Impacts of the Recent Crisis in Middle-Income Countries," World Bank - Economic Premise, The World Bank, issue 11, pages 1-4, April.
    3. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
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    More about this item

    Keywords

    Crisis; Socioeconomic effect; Governance; Human capital; Panel data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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