The Effects of Convergence in Governance on Capital Accumulation in the Black Sea Economic Cooperation Countries

Abstract : This paper aims to ascertain the effects of convergence in governance on investment decisions among a sample of 43 developing countries, using dynamic system GMM estimations. In an increasingly interdependent economic world, regions with good governance are considered to be areas of higher investment, as a result of further integration and collaborative action among member states. Since its foundation, in 1992, Black Sea Economic Cooperation (BSEC) countries have gone through a transition process and, to a large extent, this is about institutional transformation. Good governance institutions are an assurance to guarantee property rights and minimize transaction costs, thus creating an environment conducive to investment and growth. In this paper, we investigate the impact of BSEC on its member countries regarding convergence of governance institutions. We show that convergence has occurred within the region with respect to bureaucratic quality, control over corruption, law and order, internal conflict, ethnic tensions, but not to government stability and democratic accountability. The paper also calculates how much capital accumulation the region would gain by reaching the average institutional standards of the EU-12. This study is the first attempt in the BSEC region to investigate the link between regionalization and institutional convergence, at the same time as to quantify its economic impact through investment.
Document type :
Preprints, Working Papers, ...
Complete list of metadatas

Cited literature [85 references]  Display  Hide  Download

https://halshs.archives-ouvertes.fr/halshs-00559653
Contributor : Cerdi Etudes & Documents - Publications <>
Submitted on : Wednesday, January 26, 2011 - 10:51:07 AM
Last modification on : Thursday, January 11, 2018 - 6:17:18 AM
Long-term archiving on : Wednesday, April 27, 2011 - 2:49:01 AM

File

2011.03.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : halshs-00559653, version 1

Collections

Citation

Marie-Ange Veganzones, Ahmet Faruk Aysan, Omer Faruk Baykal. The Effects of Convergence in Governance on Capital Accumulation in the Black Sea Economic Cooperation Countries. 2011. ⟨halshs-00559653⟩

Share

Metrics

Record views

282

Files downloads

302