The Impact of Budget Transparency and Governance Indicators on the Financial Performance for a Selection of Developing Countries in the Middle East & Asia Region during the period (2004-2018)

Abstract

The aim of this study is to analyze the impact of the budget transparency and governance indicators on the financial performance for a selection of developing countries in the Middle East and Asia region, based on cross-sectional time series data during the period (2004-2018), using the Auto Regressive Distributed Lag method (ARDL). The results indicate that independent variables varied in their impacts on budget balance. Budget transparency index shown very slight impact on budget balance. Regarding governance, the results shown that controlling corruption and political stability indicators contributed to improving the budget balance, while regulation quality, government effectiveness and “voice and accountability” indicators led to a decline in the budget balance. Rule of law indicator was insignificant. Therefore, developing countries still need to exert huge efforts and allocate necessary resources to achieve the envisaged targets from applying budget transparency and governance concept