Debt, Growth, and Governance

Is there a relationship between public debt and economic growth via governance channels?  Evidently so.  Using the World Bank’s WGI dataset of 106 countries from 1996-2015, along with our ICRG data for robustness checking, a recent study found that “[a]lthough, public debt has negative impact on economic growth…the results are statistically positive and significant when public debt is interacted with governance, which confirms that governance is a channel by which public debt influences economic growth.”

For a closer look, cf:


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