According to the United Nations Development Program, human development is defined as “the procedure toward developing human beings decisions”, with said decisions permitting them to “start a continued and flawless growth, to be educated, to acknowledge”, just as “economic freedom, other secured civil liberties” (Turner 2011). Good governance is one of the main elements of prosperous development in any country. According to recent development literature, researchers are gradually using this term, mostly for good governance. The world’s governance is made up of all those features of the way a state is ruled (Sharma 2007). Governance has a significant role to play in economic stability, a strong legal system, better education, environmental safety, education, the creation of a good business environment, and many more things (Landell-Mills and Serageldin 1991; Brautigam 1991; Boeninger 1992). It can be managed at different levels in a progressive layer. Organization is currently being tested in different zones, from the water frameworks to edge security and also to trade frameworks as well. One of the most noteworthy pieces of organization is to break things down from an improvement point of view. According to Rodrik (2001, p. 4), “At the point when for one point of view of the trade framework—and the organization challenges it presents—from a developmental perspective, it turns out to be certain that the legislatures of creating nations and a significant number of the northern NGOs (non-governmental organizations) share similar objectives: strategy self-rule to seek after one’s own qualities and needs, destitution, lightening, and human improvement in an ecologically reasonable way”. The strong association between the organization and individual improvement was first conveyed in an inspiring statement by the United Nations Development Programme (UNDP) in 1997. “Organization has become a debated issue as verification mounts on the fundamental as it plays in choosing social prosperity” (Graham et al. 2003, p. 1). The problem is communicated as: “Appropriate administration is indispensable not basically to ensure the law and to secure it across the world by sifting through bad behavior, yet notwithstanding keeping up and developing social and monetary structure”. The UNDP arrangement archive likewise bolsters the job of administration in the improving advancement of human improvement with the accompanying articulation. The UNDP accepts that building the limit with respect to administration is fundamental to a maintainable human turn of events. In addition, a reasonable individual improvement cannot be accomplished without acceptable administration, just as administration cannot be sound unless it continues the human turn of events. Governance and human development are the two terms: parts of a whole and constant.

In the 1980s, good governance became a significant issue in development, as it could be practical for an extensive range of problems and relationships. In 2003, the World Bank published a report titled “Better Governance for Development in the Middle East and North Africa”, which stated that the growth issue is not absolute but that good governance plays a vital role in reassuring economic development and presenting dynamic social services.

Poor governance can delay economic progress and human development due to useless rule of law, political instability, and corruption control. If economies want to increase the relief of their people, then states have to progress their economic evolution and human development. Governance is the main component for wealth expansion in any nation, in particular virtuous governance. It is for conquering better economic growth and human development in any economy; the presence of good governance is vital, particularly in developing nations (Turner 2011). Usually, governance has a significant part in the extent of, for example, organization, economic constancy, the legal system, education, health, environment protection, the creation of a good business environment, and many more areas. All of these stated extents represent the undeveloped condition of a developed country (Landell-Mills and Serageldin 1991; Brautigam 1991; Boeninger 1992). Governance has significant consequences on the endurance of economic evolution and development as well as human welfare, in the very long run. Many authors have studied this enormous effect, such as Kaufmann and Kraay (2002), Pradhan (2011), Sebudubudu and Botlhomilwe (2012), and Turner (2011). Governance is an ancient concept. However, in the currently developmenting literature, researchers are progressively using this term, mainly for good governance. It is worth mentioning that governance is defined by different authors and associations, and mostly, the term “governance” encompasses all those features of the way a country is governed (Sharma 2007).

2. Human Development and Governance

Pradhan (2011) found that good governance is an important factor that can be helpful for the progress of human development in the Indian economy. A study by Kesar and Jena (2022) examined the role of governance as an indicator of human development. The major finding of this study is that the three indicators have a positive effect. Moreover, good performance in governance provides an effective impact on the HDL. Hulme et al. (2015) examined the association between governance and development issues in Asia. The cross-section data on governance have been taken from the World Bank, and their analysis includes development indicators. They found that governance has an effective impact on the development indicator, which means that the development indicator has a significant impact on governance. Cheema and Maguire (2001) concluded that external factors act via democratic governance entry factors to supply strategic offerings and use symptoms to measure their relative progress. Indicators can be treasured tools in informing external companions and recipients of help of what works and what does not work. Asongu and Nwachukwu (2017) examined the impact of globalization on inclusive development. This study basically focuses on the income aspects of countries, whether they are poor or rich; legal backgrounds; landlockedness; and political solidity. Econometric techniques such as fixed effects techniques and Tobit regressions were used, and the researchers found that proper domestic and foreign policies are used to remove constraints, and financial resources should be associated with the development of governance to progress globalization and ensure inclusive human development. In the past, human development was improved through economic growth, but in the current situation, human development could be improved through government performance. The government has the right to give attention to labor quality and the welfare of the people. If governments give appropriate attention to these two factors, human development will be improved. Moreover, Keser and Gökmen (2018) investigated the relationship between governance and human development in the case of 33 members of the European Union from 2002 to 2012. The study found that good governance has a positive impact on human development, whereas better governance improves the performance of any country. Ouma and Nadzanja (2019) measured the effect of government expenditure on human development. The study used the 19 common markets of eastern and southern Africa countries. They used the random effect model and the two-step generalized method of moments (GMM). They found that fiscal policy and governance have a significant and positive impact on human development. The result does not imply an economic condition, but rather they focused on the social condition of eastern and southern African countries. Pahlevi (2017) measured the impact of governance and expenditure on human capital in Indonesia. He used expenditures on health and education for human development in 33 provinces from 2008 to 2012. The research study concluded that expenditure and governance have a significant effect on human development and have a positive impact. Pradhan (2012) measured the relationship between corruption and HDI in Nepal. The study identified some reasons behind the relationship between corruption and HDI. These reasons are the working rule of law, political party ineffectiveness, a culture of science, and a lack of government intervention. The study also found a “W”-shaped correlation trend between HDI and corruption based on past interfaces. Caron et al. (2012) examined changes in the quality of governance in twenty-seven European countries at the state level. The proportion of good governance is explained by the indicators of governance voice and accountability, corruption, government effectiveness, and the protection of the law. The study concluded that there is a significant relationship between the governance index and the social variable. In this study, the authors stated that good governance has a significant impact on economic growth. Akçay (2006) investigated the relationship between corruption and human development. Their study found that corruption is a sign of institutional weakness and inefficient economic, social, and political outcomes. It reduces foreign direct investment, which results in a lack of development by reducing and enhancing inflation, depreciating currencies, and reducing expenditure in the health and education sections. Therefore, government plays an important role in overcoming these problems. Scholl and Schermuly (2020) examined the impact of corruption on GDP and HDI. The study found that corruption has a negative impact on HDI and that GDP has a positive impact on HDI. In addition, Gomes and Barros (2019) examined the impact of corruption and HDI in the Brazilian context for the time period 2010–2018. They found that public corruption increases more than private corruption because of the accountability and transparency in the public sector. The data show that there is a high correlation between greater corruption and a lower index of human development, which may suggest problems with accountability in the private sector. Brada et al. (2019) measured the relationship between corruption and HDI in 45 developing countries using data from 1990 to 2018. Their study found corrupt countries will receive less foreign direct investment and that GDP shows a significant relationship with HDI, while on the other hand, corruption has a negative effect on HDI. Akram et al. (2011) examined the connection between poverty, governance, and income inequality in Pakistan using data from 1984 to 2008. They concluded that there is a significant association between poverty and income inequality, while poor governance has a significant relationship with poverty in the long time period, but in the short time period, it does not have a positive impact on poverty. Finally, Uddin and Joya (2007) examined the connection between governance and development, finding that good governance leads to high per capita income, which improves social indicators. Furthermore, they explained that strong political institutions lead to good governance, which will attain a high per capita income.

3. Human Development Index and Development Expenditure

Haq and Zia (2009) examined the association between governance and the poor growth of Pakistan. Time series data were taken from 1996 to 2005 to examine this relationship. For estimation, they used the interpolation method, and they found that poverty and income inequality are increasing, while the poor’s income share and consumption are decreasing. Ordinary least squares is used to estimate the connection between governance and pro-poor growth. The results showed that there is a significant connection between governance and pro-poor growth. Furthermore, poverty and disparity could be reduced through good governance. Sudirman (2017) measured the relationship between education and health expenditure on the human development index using data from 2001 to 2015 for the provinces in Jambi. The author used a multiple regression equation to check the connection between the variables, and he found that there is no positive association between education and human development, while on the other hand, there is a significant impact of health expenditure on human development. Omodero (2019) measured the relationship between general government spending and human development in Nigeria using time series data from 2003–2017. The results have shown that capital expenses have a negative impact on the human development index, while corruption has no influence on human development. In addition, there should be a focus on the investment in capital for the development of Nigeria.

4. Human Development Index and Competitiveness

Human development has a positive relationship with competitiveness. The ultimate goal of human activity should be human growth, which aims to provide people with the ability to live healthier, longer, and more fulfilling lives. Thus, if a country manages its competitiveness well, improved human wellbeing should be the main result to be anticipated. Competitiveness has become a new paradigm in economic growth in recent years. At a time when effective government action is hampered by fiscal restrictions and the private sector has considerable obstacles to competing in both domestic and international markets, competitiveness encompasses both the limitations and challenges provided by global competition (World Economic Forum 2015). Muchdie (2017) studied the contingent relationship between global competitiveness, human development, and happiness. Cross-sectional data were taken from one hundred and twenty-three countries. The study concludes that the association between happiness and human development is a significant one. Lonska and Boronenko (2015), in their study, describe the linkage between competitiveness and human development. The authors explain that their study focuses on world comparative research. The study concluded that good competitiveness does not depict high economic growth contains. Reyes and Useche (2019) studied the relationship between competitiveness, human development, and economic growth in twenty countries. Data from 2006 to 2015 were utilized. They found that there is a strong connection between competitiveness in human development and economic growth. Finally, human activity and nations’ development are the main focus of competitiveness.

5. Human Development Index and Trade Openness

Trade liberalization literature usually supports the idea that it drives economic development. In contrast, a significant subfield of international economics is becoming more and more interested in socio-economic problems (Greenaway et al. 2002; Falvey et al. 2012). In accordance with Nunn’s (2007) research, which examined the relative quality of national institutions (security, law, and governance). Additionally, this strategy is consistent with research on the influence of social, institutional, and political variables on economic growth. Free access to the cheap cost of inputs that may be imported from other countries is another way that trade liberalization enables the industries of developing nations to become more efficient and competitive. Liberalization makes it easier for companies to innovate and manufacture goods utilizing new technology, which raises the demand for their exports. With a rise in exports, labor costs have increased. In doing so, it raises the quality of living for the labor class by increasing both their income and employment in the industrial sector (Mustafa et al. 2017). Mustafa et al. (2017) measured the relationship between trade openness, economic growth, and human development. They used data from 1990 to 2011 for 12 Asian economies. They used simultaneous equation systems and the three-stage least-squares method. They found that in Asia, trade openness has a positive impact on economic growth and human development. There is a huge success of trade liberalization policies in the region of Asia for higher growth and outside distributional policies would improve income distribution and human development. In similar research, Rizavi et al. (2020) investigated the relationship between openness, economic growth, and human development from 1990 to 2007 for South Asian countries. The study found that openness and FDI have a strong positive impact on economic growth. This research strictly follows the endogenous growth theory and trade policies’ effects on growth in the long run. Moreover, Afza and Nazir (2007) examined the impact of economic competitiveness and HRD. Their study found that the role of human resource management as a tool to improve the economic competitiveness in the South Asia region may attract foreign capital inflow and boost economic growth. Finally, Mustafa et al. (2017) measured the effect of growth, human development, and trade using data for 12 developing Asian countries from 1970 to 2011. They found that human development contributes positively to economic growth in Asia but does not appear to have a positive influence on human development.