Economic, political and social determinants of governance worldwide

The objective of this paper was to provide guidance concerning the underlying determinants of cross-country variations in institutional quality and the accompanying performance of governance institutions. Based on theoretical perspectives from the prevailing good governance and institutions literature, this study adopts a solid conceptual approach and examines the disparate theoretical views under a unified framework. The analysis suggests that the quality of governance varies across countries mainly due to differences in countries’ levels of economic development as well as political freedoms and levels of social development. However, these factors do not have a symmetric worldwide impact on governance, but their effects vary depending on the specific dimension of governance under consideration. This conclusion is attributed to the complex nature of governance as it is not only associated with economic development but also closely related to a wide variety of noneconomic factors of social and political nature. Therefore, attaining and sustaining good governance is rather a multidimensional process.