What determines governance across nations: Do economic and social globalization play a role?

This paper explores the role of two facets of globalization - economic and social - in impacting different governance indicators. Higher economic globalization emphasizes market-based policies, makes government more transparent and accountable and creates better adherence to global standards of governance. At the same time, higher social globalization that comes with the greater exchange of ideas and information as well as cultural integration, can make the populace more aware of international norms, can enhance freedom of expression via network building and exchange of ideas and can make the populace adhere better to rules in the society. Based on a sample of 142 countries over 1996 to 2013, the papers find that for economic globalization to have a beneficial impact on governance indicators, countries should have more than median levels of social globalization. Countries with low levels of social globalization fail to benefit from economic globalization. Thus, a better level of global governance is hidden in the right mix of cultural fusion along with higher labor and capital flows.