A model to explain the impact of government revenue on the quality of governance and the SDGs

Stephen Hall*, Bernadette Ann-Marie O'Hare

*Corresponding author for this work

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Abstract

This paper empirically investigates the link between the level of government revenue per capita and six indicators of the quality of governance in an unbalanced panel data set consisting of all countries in the world (217 countries; due to some missing data, (this was reduced to 196) using data from 1996 to 2020. It uses single-equation generalised method of moment (GMM) techniques and a vector autoregressive (VAR) and vector error correction model (VECM) approach to investigate this issue. The results suggest a strong effect over time whereby an increase in government revenue leads to a steady improvement in governance. These findings suggest an important virtuous circle between government revenue and governance. As a result, additional government revenue can significantly impact the Sustainable Development Goals more than our previous work has suggested.
Original languageEnglish
Article number108
Number of pages16
JournalEconomies
Volume11
Issue number4
DOIs
Publication statusPublished - 31 Mar 2023

Keywords

  • United Nations Sustainable Development Goals (SDGs)
  • Government revenue
  • Worldwide Governance Indicators; governance
  • Control of corruption
  • Government effectiveness
  • Political stability
  • Regulatory quality
  • Rule of law
  • Voice and accountability
  • GMM
  • ECM

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