An Econometric Analysis of the Impact of Administrative Governance Quality on Economic Performance in Libya: Evidence from the Period 2000-2023

Abstract

This study examines the impact of administrative governance quality on economic performance in Libya using the Autoregressive Distributed Lag (ARDL) approach . Economic performance is measured by real GDP growth, while governance indicators include the rule of law, government effectiveness, control of corruption, and a dummy variable for political stability . The bounds test confirms the existence of a long-run equilibrium relationship between governance quality and economic performance . Long-run results indicate that the rule of law and government effectiveness have positive and statistically significant effects, whereas the impact of corruption control is more pronounced in the long run. Political stability also exerts a positive and significant effect. The error correction term is negative and statistically significant, indicating that approximately 60% of short-run economic disequilibria are corrected within one period. Overall, the findings highlight that improving administrative governance quality is essential for achieving sustainable economic growth in Libya.