The effect of governance on economic growth in Palestine

الملخص EN

The purpose of this paper is to examine the relationship between governance and economic growth in Palestine.

The importance of this topic is to shed light on the crucial and vital role that the governance plays in the growth of the Palestinian economy.

This paper will prove mathematically that economic growth is a function of governance.

An econometric model was developed to prove this relationship empirically.

Moreover, a time series analysis was performed to evaluate the effect of each of the six governance indicators on economic growth in Palestine.

The data was taken from the Palestinian Central Bureau of Statistics and the World Bank Group covering the period of 2000 to 2014.

The regression model indicated that the governance variable is significant to the economic growth in Palestine.

As for the time series analysis we found that voice accountability indicator had a negative impact on the GDP.

Nonetheless, government effectiveness and control of corruption had a positive effect on the GDP.

A number of recommendations were given to Palestinian National Authority (PNA), most importantly the need to improve the quality of its services.