Working Papers, Department of Economics, Lund University
Does Governance Cause Growth? Evidence from China
Abstract: This study uses heterogeneous panel Granger causality
tests to investigate the causal relationships between quality of governance
and economic growth at the provincial level in China during the reform era.
I find a significant and positive effect of economic growth on subsequent
quality of governance, largely driven by growth in the secondary sector,
but no significant effect of quality of governance on economic growth.
These findings suggest that improvements in formal governance have not been
a key factor in China’s rapid growth, and support the proposition that
governance reforms are often a consequence, rather than a cause, of
Keywords: Asia; China; Quality of Governance; Economic Growth; (follow links to similar papers)
JEL-Codes: O11; O17; O43; O53; R11; (follow links to similar papers)
40 pages, April 30, 2015
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