Governance and economic welfare: a BRICS panel analysis

Governance and economic welfare: a BRICS panel analysis
Authors: Adrino Mazenda, Priviledge Cheteni
Journal: Journal of Governance and Regulation
Volume & Issue: Volume 10, Issue 2, Special Issue
Published: May 2021

This article investigates the relationship between governance and economic welfare in BRICS countries—Brazil, Russia, India, China, and South Africa—over the period 1996–2019. Using panel static models, including pooled OLS and fixed effects estimators, the study examines how governance, proxied by the World Bank’s World Governance Indicators (WGI), influences economic welfare through both quantitative measures (GDP growth) and qualitative indicators (income inequality reduction).

The findings reveal that governance produces varying effects across BRICS nations. Interestingly, democratic countries that follow good governance principles, such as South Africa and Brazil, exhibited negative economic welfare effects, whereas one-party states like China and Russia showed more positive outcomes. These results challenge the assumption that good governance alone guarantees economic welfare and suggest that structural policies and equitable income distribution are critical for enhancing welfare outcomes.

The article highlights the nuanced interplay between governance quality, policy implementation, and economic performance, providing important insights for BRICS policymakers. By distinguishing between governance principles and effective policy measures, the study underscores that achieving sustainable economic welfare requires a combination of sound policy, structural reforms, and targeted interventions tailored to each country’s institutional context.