Governance and Economic Growth during Times of Crisis

The global economic crisis that began in 2008 has affected all aspects of life, which has resulted in political instability, personal financial troubles, and a growing number of business bankruptcies. While these are serious issues, simply developing a government policy that injects an economy with money is not an appropriate means to achieve economic recovery and long-term economic development unless combined with an effective and efficient governing system. The present research studies whether the strong relationship between governance and growth exists during economic crises or only during non-crisis periods. The results of the current research show that the global economic crisis has had an influence on the relationship between governance and economic growth. Consequently, the results of the current research show the instability in the relationship between governance and economic growth during the economic crisis; this unsteadiness is a sign of the need for long-term strategies to promote global and national good governance practices that are not adversely affected by crises