Abstract

This article investigates the intricate relationships between democracy, governance, and economic growth in Asia, a region poised to contribute significantly to global economic prosperity by 2030. Leveraging panel data from forty-nine Asian countries spanning 1996 to 2023, the study employs the Polity 2 democracy score, the Worldwide Governance Indicators (WGI), and gross domestic product (GDP) per capita to examine these dynamics. The analysis explores the hypothesis that governance quality, more than democracy, serves as a pivotal determinant of economic outcomes. The findings reveal a strong positive association between governance quality, particularly Government Effectiveness and Regulatory Quality, and economic performance. These indicators consistently emerge as robust predictors of GDP per capita, underscoring the critical role of institutional efficiency, administrative competence, and clear regulatory frameworks in fostering sustainable growth. In contrast, democracy exhibits an inverse relationship with economic growth in most models, a result likely influenced by the economic success of non-democratic regimes such as China and Singapore. This counterintuitive finding challenges conventional assumptions about the universal primacy of democracy in driving economic development. The study also highlights the complex interplay between governance and democracy, noting that improvements in governance can reinforce democratic practices. However, the varying significance of governance dimensions, such as Voice and Accountability, suggests that fostering democratic freedoms may require targeted efforts distinct from broader governance reforms. These results emphasize the need for policymakers in Asia to prioritize governance reforms that enhance institutional effectiveness, transparency, and accountability while considering the region’s unique political and economic contexts.