Relationship between governance and economic growth: A modeling test by application to the case of Tunisia

The purpose of this article is, by using a Vector Error Correction Model (VECM) applied to the case of Tunisia, to highlight the possible relationship of governance with economic growth. Indeed, considered as the way by which power is exercised in the management of economic and social resources of a country, several empirical studies have attempted to identify the relationship between the governance and the economic growth of a country. The majority of works were in the form of cross-section studies, without considering the time dimension. Similarly, the works usually based in the construction of the quality of the governance of a country on some components without taking into account all the qualities mentioned. Indeed, using a database of various official organizations, we have tried to build an aggregate indicator, supposedly apprehend the quality of Tunisian institutions. Certainly, it turned out from the various tests and investigations carried that a causal relationship exists between governance and economic growth. In other words, like the governance affects growth, the latter in turn has an effect on the quality of the institutions of the country.