The Quality of Governance in Europe: A Guide for the Perplexed

This paper investigates the quality of governance in the European geographical area for the period 1995–2019 employing the six World Governance Indicators (The World Bank, 2020): control of corruption, government effectiveness, political stability and absence of violence/terrorism, rule of law, regulatory quality, voice and accountability. With regard to EU membership, we partition countries into three blocks: Historical Members, Entrants, and Outsiders. We check systematic differences, static and dynamic, between the three blocks to verify whether EU membership makes a difference. Results highlight a complex scenario: while statically Historical Members outperform Entrants and Entrants outperform Outsiders on all six dimensions, dynamically we find club convergence in growth rates for all variables across the three blocks. Historical Members stand in a high equilibrium club, except for Greece. In a single case, we even observe absolute convergence for a low club of voice and accountability. Several Outsiders stand consistently either in the high or the low club, while Entrants vary widely in their performances. The remote determinants of governance’s quality are very difficult to identify because cultures, institutions and economies interact in complex and unexpected ways; moreover, natural experiments of EU memberships do not exist, so we cannot establish causal effects in the strictest sense. Nonetheless, for the first time, we establish a clear picture of all main dimensions of government’s quality for the European area, achieving at least a number of robust empirical facts which can be used by scholars, policymakers, and European administrators.