Economic governance and economic growth in Mauritius

- 1 January 2020

This chapter examines the role of economic governance in fostering economic growth for the case of Mauritius. Rigorous econometric analysis is used to address the dynamic and endogeneity issue inherently present in growth modelling. The results show that economic governance had a significant positive effect on output in Mauritius during the 1996–2017 period. Private investment is reported to have had the most influential growth determinant while human capital, openness level and foreign direct investment (FDI) are also found to have been critical drivers of the Mauritian growth. Interestingly a reverse causal relationship in the economic governance-growth link as well as indirect relationship through the domestic and foreign investment channel are confirmed. Further analysis revealed that domestic and foreign direct investment levels as well as human capital exercised some effects on economic governance. The implications are interesting, and can be used as a basis to inform policy making as Mauritius embarks on its next development cycle.
 
[This research was published as a chapter in the Handbook of Governance in Small States | Taylor & Francis Group (taylorfrancis.com)]

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