Type of the article: Research Article
Abstract
The widening development gap between well-governed and poorly governed nations – highlighted by the reversal since 2020 of two decades of human development convergence – underscores the need to understand which specific governance capabilities drive development and how. This study aims to estimate the effect of government leadership and foresight on national development and to identify the institutional channels through which this effect is transmitted. Drawing on the Chandler Good Government Index merged with World Bank and UNDP indicators, the analysis employs pooled OLS with year fixed effects, mediation analysis with bootstrap inference, and a comprehensive set of robustness tests on an unbalanced panel of 120 countries over 2021–2025. Leadership and foresight are positively and significantly associated with GDP per capita, life expectancy, and the Human Development Index (β = 4.049, p < 0.01 for ln GDP per capita; a one-standard-deviation increase corresponds to a 79% increase in GDP). The mediation analysis – the study’s central contribution – reveals that 152.1% of the total effect is transmitted indirectly through other governance capabilities, principally robust laws (157.4%), strong institutions (137.6%), and attractive marketplace (133.4%), while the direct residual effect is negative (β = −2.110, p < 0.01), indicating a “vision–capacity gap.” The effect is significant only in high-income economies (β = 1.506, p < 0.01) and absent in lower-income contexts. These findings demonstrate that leadership functions as a meta-governance capability whose developmental impact is channeled through, rather than independent of, the broader institutional architecture.