GOOD GOVERNANCE AND ECONOMIC GROWTH: TRACING THE PATH

Abstract

This paper explored on the paths that link good governance and GDP of 16 regions in the Philippines. Both the direct link and the indirect path were measured. Tracing the indirect links utilized human development indicators to include literacy rate, poverty incidence, health index, and employment rate. The 2008 NSCB data were used in the path analysis conducted. Results showed that good governance directly accounted for 40% of the national income. The percentage contribution was tantamount to the regions’ inclusion in the top five high and bottom ranking of GGI and GDP. The indirect effects, on the other hand, contributed 33% of the GDP. As a whole, three-fourths of the country’s domestic output could be explained by good governance. The local chief executive is significant reformers to augment regional and national income and is proven in this study that good governance has a causative effect towards economic growth.