Elnara Samedova

In modern conditions, the one-sidedness in the economy of Azerbaijan makes it necessary to accelerate the diversification process of the country’s economy. From this point of view, the development of the non-oil sector in the country presents the main priority of the government’s economic policy in Azerbaijan. The purpose of the study is to investigate ways of ensuring the diversification of the national industries in Azerbaijan, which aims to move to a new economic growth model in modern conditions. The study analyzes the economy’s current state and export diversification level in Azerbaijan using the Herfindahl-Hirshman index. As a result of the analysis, the level of diversification in Azerbaijan’s economy and exports was found to be very low (in 2021, the Herfindahl-Hirshman index was 0.23 for the economy and 0.79 for exports). The findings indicate that cooperation between the state and business plays a significant role in increasing the diversification of the economy following the goals of sustainable development of Azerbaijan. On the other hand, it helps stimulate entrepreneurship development in the non-oil sector. One of the ways to solve existing problems in this area is to create Eximbanks to increase the country’s export capabilities of non-oil products. The study offers recommendations to speed up the process of diversification of the economy in Azerbaijan and increase its efficiency.

Telecommunication technologies have entered all spheres of society, creating wide chances for improvement. The splendid, safe, and effective digital revolution in best practices and the productive use of resources in this field are the driving force behind the improvement of innovation. The aim of the study is to identify the main problems of the arrangement and evolution of the digital economy in Azerbaijan, as well as to offer recommendations for the successful usage of digital technology opportunities. Using regression analysis, the impact of the digital economy on economic growth was determined. The analysis showed a direct relationship between the indicators (r = 0.857) and a high closeness of the relationship on the Cheddock scale. The outcomes showed that during the last eight years (2015–2023), there has not been a significant growth in the ICT Development Index in Azerbaijan. According to the ICT Development Index, Azerbaijan ranks 87th, the Development Index of e-government – 83rd, and the Network Readiness Index – 75th in the world. The results stressed the necessity of state support for the digital economy in Azerbaijan to solve problems in this area and the significance of applying the progressive foreign countries’ experience in the digitalization of the economy. The study examines the factors influencing the development of the digital economy in Azerbaijan and offers proposals and recommendations for the effective use of digital technologies that have practical and scientific significance.

Type of the article: Research Article

Abstract
The widening development gap between well-governed and poorly governed nations – highlighted by the reversal since 2020 of two decades of human development convergence – underscores the need to understand which specific governance capabilities drive development and how. This study aims to estimate the effect of government leadership and foresight on national development and to identify the institutional channels through which this effect is transmitted. Drawing on the Chandler Good Government Index merged with World Bank and UNDP indicators, the analysis employs pooled OLS with year fixed effects, mediation analysis with bootstrap inference, and a comprehensive set of robustness tests on an unbalanced panel of 120 countries over 2021–2025. Leadership and foresight are positively and significantly associated with GDP per capita, life expectancy, and the Human Development Index (β = 4.049, p < 0.01 for ln GDP per capita; a one-standard-deviation increase corresponds to a 79% increase in GDP). The mediation analysis – the study’s central contribution – reveals that 152.1% of the total effect is transmitted indirectly through other governance capabilities, principally robust laws (157.4%), strong institutions (137.6%), and attractive marketplace (133.4%), while the direct residual effect is negative (β = −2.110, p < 0.01), indicating a “vision–capacity gap.” The effect is significant only in high-income economies (β = 1.506, p < 0.01) and absent in lower-income contexts. These findings demonstrate that leadership functions as a meta-governance capability whose developmental impact is channeled through, rather than independent of, the broader institutional architecture.