Government effectiveness and logistics performance: evidence from a cross-country supply chain perspective

Abstract We study national logistics performance using a biennial panel of 138 countries over the period 2007–2018, linking the World Bank’s LPI to macroeconomic, financial, and institutional covariates. Prior results show several positives, but we prioritize Government Effectiveness as the key predictor on theoretical and empirical grounds: it maps directly to customs capability, project execution, and service quality, and remains strongly positive across generalized estimating equations (population-averaged), fixed-effects with Driscoll–Kraay errors, and an equally spaced AR(1) robustness subset. In Generalized Estimating Equations (GEE) with year effects, Government Effectiveness is a stable, policy-salient correlate of higher LPI, while trade openness, control of corruption, human capital, employment, remittances, and domestic credit enter as controls and retain expected signs. Findings suggest that strengthening state capability yields meaningful gains in logistics performance beyond income and trade levels. Our findings underscore that state capability is not only an institutional asset but also a critical enabler of supply chain reliability and resilience in international trade.