Governance quality and economic growth in ASEAN countries from 1996 to 2023

This study utilizes panel data from 1996 to 2023 to investigate the impact of fiscal policy and the quality of governance on economic growth in the members of the Association of South East Asian Nations (ASEAN). The analysis is based on a rich data set covering almost 30 years, reflecting the changing economic environment in the 9 ASEAN nations. The feasible generalized least squares (FGLS) procedure is used to simultaneously eliminate the effects of autocorrelation and heteroskedasticity. Awareness that this procedure leads to a bias-free and efficient estimator strengthens the model’s reliability. It is found that political stability, voice and accountability, and control of corruption have a significant and positive impact on gross domestic product (GDP) per capita. The positive impact of government spending on economic growth implicates prudential fiscal management. On the other hand, the population growth rate has a slight adverse effect on per capita income, and inflation is not statistically significant. These results suggest that fiscal policy and governance quality are crucial for ASEAN’s sustainable development. The policy suggestions focus on efficient public expenditure and define clear institutional and anti-corruption policies. Future studies may extend this framework by applying the system generalized method of moments or panel autoregressive distributed lag to address endogeneity, thereby providing a stronger empirical basis for ASEAN’s long-term vision of inclusive and resilient growth.