INSTITUTIONAL QUALITY, GOVERNANCE AND POVERTY REDUCTION IN THE BRICS

Abstract

This study examined the relationship between institutional quality, governance and poverty reduction in 5 BRICS countries from 2000 to 2021. The System Generalised Methods of Moments (SYS-GMM) model was applied for both models. The study revealed that all the variables under investigation were free from Arellano – Bond Serial Correlation, Multicolinearity and Heteroskedasticity. The System-Generalised Method of Moments model J-value statistics used assess the validity of the instrumental variables reported 0.58 for model 0.54 for model 2, which therefore signifies that the use of SYS-GMM model is valid. The SYS-GMM revealed that control of corruption, political stability, the rule of law, government effectiveness, voice and accountability, GDP per capita and trade openness have a significant and positive relationship with poverty reduction. The study recommended that BRICS governments should prioritise implementing poverty reduction programmes that encompass vulnerable communities. BRICS governments should also invest much in fighting corruption, ensuring the rule of law practices and maintaining government effectiveness to reduce poverty in their economies.

Keywords

• brics economies
• institutional quality
• governance
• poverty reduction