Democracy, Governance and Economic Growth: Time Series Evidence From Pakistan

Asif Razaq, Rabia Nazir, Faree

Abstract

Debate on the nature and direction of linkages between democracy, governance, and economic growth is evolving. This paper attempts to determine the relationship between governance quality, the strength of democracy, and economic growth in Pakistan using timeseries data from 1984 to 2017. The paper also tests and confirms the causality running from democracy and governance to economic growth through the Granger causality test. No relationship was observed between governance and growth in our data. We propose a very little variation in the governance indicators of Pakistan over the studied period for this insignificant impact of governance measure on economic growth. However, democracy has a positive and significant impact on the GDP and its growth.