Estimating the Impact of Governance on Human Development in Egypt: An Econometric Model

Abstract

This thesis aims to estimate the impact of governance on human development with special reference to Egypt. Recent literature has contrasted human development as the ultimate goal of the development process. Governance involves all the political, economic, social, and technological aspects of government. In the modern age, all aspects of people’s lives are controlled and impacted by the government of the country in which they live. It is widely known that governance is central to the successful implementation of sustainable development policies. This study empirically analyzed the influence of governance elements on human development using a set of cross country panel data from 140 countries from 1996 to 2019, the countries of the study were categorized as high-income countries, upper-middle-income countries, lower-middle-income countries, and low-income countries as per the world bank classification of the countries. The methodological approach applied followed the Hausman test procedures based on the Fixed Effects (FE) model, empirical results reveal that good governance has a significant direct impact on human development worldwide while Vector Autoregressive (VAR) Model which ended up estimating the Vector Error Correction Model VECM shows that good governance has an impact on human development in Egypt. The impact of six elements of governance on human development is different in each category of countries however, good governance is not the most influential factor on human development in the countries under study. The results show a higher positive significant impact for the improved sanitation facilities, population, and urbanization on human development. in addition, the government spending on health has a significant impact on human development.