a Look at the Effects of Good Governance Indicators from Islamic Perspective and its Influence on Economic Growth

One of the main aims of all Economic Systems, particularly Islamic Economics, is the achievement of Economic Development and Growth. In this respect, various models of economic growth, specially the Neo-classic growth model, believe that the variance in economic activities of countries originates from variance in economic factors such as; capital (physical and human) and output. However, the variance in capital storage and output itself has its roots in factors, introduced by the Institutional economists as, the institutional structure of each country. In this study we shall look into the effect of institutional factor, alongside other economic factors, on economic growth. Based on this, the hypothesis under study in this research is the analysis of a positive and meaningful relation between the institutional environment and the economic growth. Here, the institutional factor includes governmental institutions (the right to express an opinion and being answered, political stability, corruption control, rule of law, bureaucratic conditions and effectiveness of government) which have been studied, generally and specifically, for the Islamic countries under consideration from amongst countries of different development levels, in the period between 1980-2005, by using the method of compositional data. The results show that the level of influence of institutional and governmental factors for Iran, Egypt, Turkey and Indonesia, in comparison with other countries, is of a lesser degree.