Determinants of Government Effectiveness

Abstract

The direct relationship between government effectiveness and the population's well-being has generated a growing interest about the explanatory factors of governance quality. Thus, the aim of this study is to determine the determinants of government effectiveness, in relation to the organizational environment and political and internal characteristics of public administrations. For this, we used a sample composed by 202 countries observed between 2002 and 2008. A World Bank governance indicator represents the government effectiveness. We estimated a panel data dependence model by the Generalized Method of Moments estimator to avoid heterogeneity and endogeneity problems. Furthermore, a CHAID algorithm provides a classification of governance quality according to the predicted determinants.

The results show that government effectiveness is initially explained by the organizational environment, related to economic development and educational status. Later, and according to countries’ income distribution, political constrains and some organizational characteristics, such as gender diversity and government size, may improve governance quality.

Keywords:

• government effectiveness
• political factors
• gender diversity