PUBLIC GOVERNANCE AND ECONOMIC GROWTH IN THE TRANSITIONAL ECONOMIES OF THE EUROPEAN UNION

According to new growth theories, public governance is an important determinant for sustained economic growth. This study examines the impact of six public governance indicators, including voice and accountability, political stability and the absence of violence/terrorism, government effectiveness, regulatory quality, rule of law and control of corruption, on the economic growth in the transitional economies of the European Union during the 2002-2013 period. The results show that all governance indicators except regulatory quality had a statistically significant positive impact on economic growth. Our findings also indicate that control of corruption and rule of law had the largest impact on economic growth, while political stability had the lowest impact.