IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v19y2022i11p6679-d827962.html
   My bibliography  Save this article

Does Governance Quality Matter for the Selection of Policy Stringency to Fight COVID-19?

Author

Listed:
  • Yan Wang

    (School of Economics and Management, Huangshan University, Huangshan 245021, China)

Abstract

Independent of different national conditions, an indisputable fact is that the worldwide governments should play a role in fighting the ongoing COVID-19. To make clear the determinants of government response to tackle COVID-19, I investigate the impact of governance quality. To do so, I newly create an overall governance index based on six dimensions of Worldwide Governance Indicators (WGI) from the World Bank to proxy governance quality. I regress the overall governance index with controls on the stringency index from the Oxford COVID-19 Government Response Tracker database. Using pooled and panel data models with individual and time fixed effects, I find that the relationship between governance quality and policy stringency for 339 days across 163 countries is significantly nonmonotonic. Countries with middle governance quality select a high level of policy stringency in contrast to those with high and low governance quality. I also find that policy stringency significantly increases when daily new cases increase. The findings highlight the role of governance quality in deciding the stringency level of public health policies.

Suggested Citation

  • Yan Wang, 2022. "Does Governance Quality Matter for the Selection of Policy Stringency to Fight COVID-19?," IJERPH, MDPI, vol. 19(11), pages 1-14, May.
  • Handle: RePEc:gam:jijerp:v:19:y:2022:i:11:p:6679-:d:827962
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/19/11/6679/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1660-4601/19/11/6679/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bargain, Olivier & Aminjonov, Ulugbek, 2020. "Trust and compliance to public health policies in times of COVID-19," Journal of Public Economics, Elsevier, vol. 192(C).
    2. Mr. Pragyan Deb & Davide Furceri & Mr. Jonathan David Ostry & Nour Tawk, 2020. "The Effect of Containment Measures on the COVID-19 Pandemic," IMF Working Papers 2020/159, International Monetary Fund.
    3. Licht, Amir N. & Goldschmidt, Chanan & Schwartz, Shalom H., 2007. "Culture rules: The foundations of the rule of law and other norms of governance," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 659-688, December.
    4. Mahmud, Mahreen & Riley, Emma, 2021. "Household response to an extreme shock: Evidence on the immediate impact of the Covid-19 lockdown on economic outcomes and well-being in rural Uganda," World Development, Elsevier, vol. 140(C).
    5. J. Ott, 2011. "Government and Happiness in 130 Nations: Good Governance Fosters Higher Level and More Equality of Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 102(1), pages 3-22, May.
    6. Zaremba, Adam & Kizys, Renatas & Aharon, David Y. & Demir, Ender, 2020. "Infected Markets: Novel Coronavirus, Government Interventions, and Stock Return Volatility around the Globe," Finance Research Letters, Elsevier, vol. 35(C).
    7. Munirul H. Nabin & Mohammad Tarequl Hasan Chowdhury & Sukanto Bhattacharya, 2021. "It matters to be in good hands: the relationship between good governance and pandemic spread inferred from cross-country COVID-19 data," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-15, December.
    8. Neukirchen, Daniel & Engelhardt, Nils & Krause, Miguel & Posch, Peter N., 2022. "Firm efficiency and stock returns during the COVID-19 crisis," Finance Research Letters, Elsevier, vol. 44(C).
    9. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2004. "Governance Matters III: Governance Indicators for 1996, 1998, 2000, and 2002," The World Bank Economic Review, World Bank, vol. 18(2), pages 253-287.
    10. Freytag, Andreas & Pehnelt, Gernot, 2009. "Debt Relief and Governance Quality in Developing Countries," World Development, Elsevier, vol. 37(1), pages 62-80, January.
    11. Ashraf, Badar Nadeem, 2020. "Economic impact of government interventions during the COVID-19 pandemic: International evidence from financial markets," Journal of Behavioral and Experimental Finance, Elsevier, vol. 27(C).
    12. Bichaka Fayissa & Christian Nsiah, 2013. "The impact of governance on economic growth in Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 47(1), pages 91-108, January-J.
    13. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    14. Benno Torgler & Markus Schaffner & Alison Macintyre, 2007. "Tax Compliance, Tax Morale and Governance Quality," CREMA Working Paper Series 2007-17, Center for Research in Economics, Management and the Arts (CREMA).
    15. Leslie Roberts, 2020. "Why measles deaths are surging — and coronavirus could make it worse," Nature, Nature, vol. 580(7804), pages 446-447, April.
    16. Adeel Malik, 2002. "State of the Art in Governance Indicators," Human Development Occasional Papers (1992-2007) HDOCPA-2002-07, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    17. Cevat Giray Aksoy & Michael Ganslmeier & Panu Poutvaara, 2020. "Public Attention and Policy Responses to Covid-19 Pandemic," CESifo Working Paper Series 8409, CESifo.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Shubin & Li, Jian & Razzaq, Asim, 2023. "Do environmental governance, technology innovation and institutions lead to lower resource footprints: An imperative trajectory for sustainability," Resources Policy, Elsevier, vol. 80(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vincenzo Alfano & Salvatore Ercolano, 2022. "Stay at Home! Governance Quality and Effectiveness of Lockdown," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 159(1), pages 101-123, January.
    2. Al-Maadid, Alanoud & Alhazbi, Saleh & Al-Thelaya, Khaled, 2022. "Using machine learning to analyze the impact of coronavirus pandemic news on the stock markets in GCC countries," Research in International Business and Finance, Elsevier, vol. 61(C).
    3. Gebka, Bartosz & Kanungo, Rama Prasad & Wildman, John, 2024. "The transition from COVID-19 infections to deaths: Do governance quality and corruption affect it?," Journal of Policy Modeling, Elsevier, vol. 46(2), pages 235-253.
    4. Abel Brodeur & David Gray & Anik Islam & Suraiya Bhuiyan, 2021. "A literature review of the economics of COVID‐19," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1007-1044, September.
    5. Hazans, Mihails, 2011. "What explains prevalence of informal employment in European countries : the role of labor institutions, governance, immigrants, and growth," Policy Research Working Paper Series 5917, The World Bank.
    6. Peng, Yi-Ting & Chang, Tsangyao & Ranjbar, Omid & Xiang, Feiyun, 2024. "Has the COVID-19 pandemic shock transmitted to the u.s. stock market: Evidence using bootstrap (A)symmetric fourier granger causality test in quantiles," The North American Journal of Economics and Finance, Elsevier, vol. 72(C).
    7. Narasingha Das & Partha Gangopadhyay, 2023. "Did weekly economic index and volatility index impact US food sales during the first year of the pandemic?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-23, December.
    8. Alm James & Barreto Raul A., 2024. "Trust in Government in a Changing World: Shocks, Tax Evasion, and Economic Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 24(1), pages 439-487, January.
    9. Richard Mawulawoe Ahadzie & Dan Daugaard & Moses Kangogo & Faisal Khan & Joaquin Vespignani, 2024. "COVID‐19, Mobility Restriction Policies and Stock Market Volatility: A Cross‐Country Empirical Study," Economic Papers, The Economic Society of Australia, vol. 43(2), pages 184-203, June.
    10. Deev, Oleg & Plíhal, Tomáš, 2022. "How to calm down the markets? The effects of COVID-19 economic policy responses on financial market uncertainty," Research in International Business and Finance, Elsevier, vol. 60(C).
    11. Fisayo Fagbemi & Geraldine E. Nzeribe & Tolulope T. Osinubi & Simplice A. Asongu, 2021. "Interconnections between Governance and Socioeconomic Conditions: Understanding Sub-Saharan African Challenges," Working Papers of the African Governance and Development Institute. 21/099, African Governance and Development Institute..
    12. Natkhov, T. & Polishchuk, L., 2017. "Political Economy of Institutions and Development: The Importance of Being Inclusive. Reflection on "Why Nations Fail" by D. Acemoglu and J. Robinson. Part I. Institutions and Economic Devel," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 12-38.
    13. Herjuna Qobush Izzahdi & Ani Wilujeng Suryani, 2023. "COVID-19 Vaccination, Government Strict Policy and Capital Market Volatility: Evidence from ASEAN Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 117-135.
    14. Niclas Berggren & Christian Bjørnskov, 2023. "Does legal freedom satisfy?," European Journal of Law and Economics, Springer, vol. 55(1), pages 1-28, February.
    15. Aharon, David Y. & Siev, Smadar, 2021. "COVID-19, government interventions and emerging capital markets performance," Research in International Business and Finance, Elsevier, vol. 58(C).
    16. Simone Schotte & Michael Danquah & Robert Darko Osei & Kunal Sen, 2023. "The Labour Market Impact of COVID-19 Lockdowns: Evidence from Ghana," Journal of African Economies, Centre for the Study of African Economies, vol. 32(Supplemen), pages 10-33.
    17. ROUGIER Eric, 2015. ""The parts and the whole”: Unbundling and re-bundling institutional systems and their effect on economic development," Cahiers du GREThA (2007-2019) 2015-12, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    18. Alfano, Vincenzo & Capasso, Salvatore & Ercolano, Salvatore & Goel, Rajeev K., 2022. "Death takes no bribes: Impact of perceived corruption on the effectiveness of non-pharmaceutical interventions at combating COVID-19," Social Science & Medicine, Elsevier, vol. 301(C).
    19. Momi Dahan & Michel Strawczynski, 2020. "Budget institutions and government effectiveness," Journal of Public Budgeting, Accounting & Financial Management, Emerald Group Publishing Limited, vol. 32(2), pages 217-246, April.
    20. Gu, Tiantian & Venkateswaran, Anand & Erath, Marc, 2023. "Impact of fiscal stimulus on volatility: A cross-country analysis," Research in International Business and Finance, Elsevier, vol. 65(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:19:y:2022:i:11:p:6679-:d:827962. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.