The Effect of Government Size and Good Governance on Human Development by Using Geographical Weighted Regression

The main objective of this paper is to study the effect of government size and good governance on human development in different countries in 2000, 2005 and 2010. For this purpose, geographical weighted regression (adaptive spatial kernels) was used for data analysis considering significance of Moran statistic and spatial correlation of Human Development Index. Results (obtained utilizing ArcGis 9.3 software) indicate that on average, government size and good governance have an overall positive impact on human development index. Specifically, the effect of government size shows a decline between 2000, 2005 and 2010, whereas, the effect of good governance shows an increase from 2000 to 2005 and a decline from 2005 to 2010 respectively. In the case of Iran, findings indicate that regional impact coefficient of government size is positive in 2000 and 2005, while it is negative in 2010. The effect of good governance in Iran is positive with an increase in effect intensity. We also analyzed the effects of government size and good governance specifically on four groups of countries in terms of the level of development.