Chapter 4: Does Political Environment Impact Upon Government Effectiveness? – A Panel Data Investigation for Southeast Asian Countries

Present study investigates the impact of five different worldwide governance indicators (WGIs)–Voice and Accountability (VA), Political Stability and Absence of Violence/Terrorism, Regulatory Quality, Rule of Law (RL), and Control of Corruption (CC) on Government Effectiveness for eleven South East Asian Countries during the period of 2002–2021. The study is conducted with the help of WGI consists of six composite indicators of broad dimensions of governance which is published by the World Bank. Panel regression technique was applied to estimate the impact of different variables on Government Effectiveness. The regression result shows evidence of impacts of different indicators on Government Effectiveness. The data analysis shows that compared to pooled OLS (POLS), Fixed Effects Model (FEM), Random Effect Model (REM), and Generalized Method of Moments (GMM) are the appropriate models. GMM results show that three predictors/independent variables as CC, RL, and VA are found to be statistically significant at a 1% level.