GOOD GOVERNANCE AND ECONOMIC GROWTH: AN INVESTIGATION OF THAILAND AND SELECTED ASIAN COUNTRIES

Abstract

Good governance has been placed an important factor in economic development especially in developing countries. Consequently, good governance is set to be one of the development goals in the millennium of the United Nations. The paper aims at comparatively investigating level of governance of Thailand and few other Asian countries. The study examined Worldwide Governance Indicator (WGI) comparatively among selected Asian countries. High percentile ranks of the WGI were found in advanced economies. Framework of production function is used to quantitatively analyze effect of being good governance on income per head. The production function was estimated for 16 Asian countries during 1996 - 2016 using the fixed effect model indicated by the Hausman Test. The result showed that apart from capital per head and total factor productivity growth, the good governance can additionally be a significant factor that contributes to growth of income per head. A higher composite governance index by 1 percent from the past year can help raise country's income per head by US $31.34 or 0.54 percent per year. For Asian developing countries, the good governance is therefore a crucial factor that can contribute significantly to their growth.