Confidence, Governance, and Growth

The recent financial crisis of the USA and the associated Euro Zone crisis have opened the eyes of the global policy makers and managers of economies in the world in respect of exploring the factors behind it. The present study considers three principal indicators of development—growth, confidence, and governance—for a sample of eight countries with differences in developmental positions to examine whether there is any sort of causal relations among them. By applying the Granger causality test, it observes that in most of the countries, except Greece, there are missing linkages among the indicators in a gross sense. China and India with very poor levels of governance factor have grown at higher magnitudes.