Investigating the Effect of Good Governance Dimensions on the Sustainable Development Index of Iran

According to many economics and development experts, governance is an influential factor in economic and sustainable development, and observance of the good governance principle is an appropriate foundation for management of various financial resources in an efficient way in order to accomplish sustainable development in different societies. Therefore, in the current study, the effect of good governance dimensions (political, social and economic) on the sustainable development index in Iran is examined based on data from reputable international organizations and usage of the econometric model in the period of 1997-2018. According to the variability test of variables and having a single root, the Johnson Joe Celsius model is used, and the sustainable development variable (with a combination of components of sustainable development including economic growth, poverty alleviation, and preserving the environment) has been calculated based on the principal component analysis technique. After estimating econometric models, this study's results indicate that social governance is the most important and influential governance dimension on Iran's sustainable development index among governance dimensions. Overall, the good governance has a positive effect of 1.39 percent on the sustainable development index. The influence of governance variables on the sustainable development index is significant and in line with economic theories.