Investigating the Impact of Good Governance on Inflation Rate in Selected Countries in the MENAP Region from 2006 to 2017

Abstract

Although there is no single view on the causes of inflation, however some considers the improvement in the performance of institutions, including good governance, as one of the important factors in reducing inflation. The important question is whether empirically good governance indicators affect inflation. In This study, effect of Good Governance on Inflation Rate was considered by using of selected member countries of Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region in period of 2006 to 2017 in 7 separate pattern. The results indicate that, logarithm changes of control of corruptions, Vice and Accountability, and average of good governance have a negative and significant effect on the logarithm changes of consumer price index growths. On the other hand, as observed, among the supporting variables the logarithm changes of government size and trade liberalization have a negative and significant effect on the logarithm changes of consumer price index growths in the most patterns.