Governance Quality Under Economic Uncertainty: Global Insights

Abstract

This study examines the impact of economic uncertainty on governance quality using a cross-country panel data set from 1993 to 2022. Governance quality is measured through control of corruption, regulatory quality, government effectiveness and political stability. Results show that economic uncertainty significantly weakens governance, with pronounced effects on political stability and government effectiveness, particularly in higher-income countries. Robustness checks, including inverse probability weighting and alternative uncertainty measures, confirm these findings. The study underscores the critical role of economic stability in mitigating corruption, reducing political instability and supporting Sustainable Development Goal 16 by fostering stronger governance globally.