The Influence of Rule of Law on Government’s Sustainable Economic Management: Evidence from China

Abstract

The Chinese government has continuously stressed the Chinese model and its characteristics for national economic governance. As a result, it is worth studying the effect of China’s rule of law on the government’s sustainable economic management, and the rule of law regarding this model can also provide a reference for governing other countries. This paper adopts the multiple linear regression analysis method using time-series data from 2007 to 2017 and from 2002 to 2019. This reflects the rule of law in the government’s sustainable economic management via the impact on government institutions, people’s courts, people’s procuratorates, and social organizations on the economy. The results show that the economic effect of the rule of law on government sustainable economic management is not significant. The rule of law in fiscal revenue and social organizations, rather than being arbitrarily dictated by powerful people, positively affects the economy. This effect was seen only in the 2002–2019 time series, but not in the 2007–2017 time series. Based on these results, it is suggested that China should strengthen the rule of law in managing its courts and procuratorates to enhance their roles in ensuring and accelerating sustainable economic development and regulating government activities. That is, the economic management effect of the public sectors, which indirectly participate in economic governance, is insufficient. This and other insightful policy recommendations are suggested to assist the government and policymakers in more effective and efficient sustainable economic management. Therefore, the system and regulations regarding their governance should not only focus on economic effects but also pay attention to the sustainable effects of economic development.