The Rule of Law in the ESG Framework in the World Economy

LEOGRANDE, ANGELO (2023): The Rule of Law in the ESG Framework in the World Economy.

Abstract

In this article, I have estimated the Rule of Law for 193 countries using data from the Environment Social and Governance-ESG database of World Bank. I have used different econometric techniques to estimate the value of “Rule of Law” i.e.: Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled OLS. I found that Rule of Law is positively associated, among others to “Regulatory Quality” and “Control of Corruption” and negatively associated among others to, “Access to Electricity” and “Prevalence of Overweight”. I have performed a cluster analysis with the k-Mean algorithm optimized with the Elbow Method and I find the presence of four clusters. Finally, I present a confrontation among eight different machine-learning algorithms to predict the level of Rule of Law. I find that Linear Regression is the best predictor according to MAE, MSE, RMSE and R-squared.

• Item Type: MPRA Paper
• Language: English
• Keywords: Analysis of Collective Decision-Making, General, Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behaviour, Bureaucracy, Administrative Processes in Public Organizations, Corruption, Positive Analysis of Policy Formulation, and Implementation.
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D70 - General; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice ; Clubs ; Committees ; Associations; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy Formulation and Implementation

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