Governance spending fixation as a tool for reform to improve institutions

Bibliographic Data

ID15068348
AuthorsEimantas Blažys (0000-0002-2927-8175, Faculty of Economics, Economic Policy Department, University of Vilnius, Vilnius, Lithuania, corresponding author)
Year2020
Volume33
Issue1
Pages934-956
Publication date2020-01-01
Open AccessYes
TypeARTICLE
VenueEconomic Research-Ekonomska Istraživanja (JOURNAL)
Journal identifiersISSN: 1331-677X • E-ISSN: 1848-9664
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/1331677x.2019.1676282
OpenAlexW3015648917
LanguageEN
References cited43

There is a consensus in the scientific community that most often the main obstacle to development is the absence of good institutions, however, it is also widely recognised, that this idea is of little use without explanations on how they can be improved and made to self-sustain ‘good equilibrium’. Purpose of this article is to propose such an explanation together with a tool for reform that could potentially address this issue. For this purpose, literature review is conducted to explore links of institutions to economic growth in search for opportunity to have a positive effect to the system through means of reform. Such an opportunity is found exploring governance-corruption-economic growth connection, to exploit which, a simple method is proposed that involves only basic math. A matching exercise between governance spending variables and governance evaluation variables reveals both a best way to judge governance spending and a potential value for orientation that could be used for limiting misallocation of resources in countries with governance overspending. At first glance a modest find may have significant practical implications, as this value could be used as a tool for reform, application of which could be expected to have an effect in two complementary ways: pragmatic – inefficient use of resources could be limited by diverting them to other government sectors; and incentives based, which when looked at through a lens of literature on ‘New institutional Economics’ looks especially promising, as in essence it could potentially enable application of principle of free market in state governance for most of poorly governed post-socialist European countries

Business · Corporate governance · Environmental health · Political science · Process management · Corruption and Economic Development · Economic Growth and Development · Local Government Finance and Decentralization · Medicine · Public Administration · Finance

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Open DOISci-HubOpen Access