The Role of Corporate Governance in Achieving Sustainable Development in Libya (In Light of WGI Challenges)

Abstract

This research analyzes the role of Corporate Governance (CG) in achieving Sustainable Development (SD) in Libyan institutions, considering the structural constraints imposed by weak Macro Governance (WGI). The study addresses a critical gap by distinguishing between micro-level corporate mechanisms and the macro-level institutional environment. Results indicate that Libya’s governance performance remains critically low, ranking within the bottom 5% globally across all World Bank indicators from 2018 to 2023. This persistent decline in indicators such as political stability, regulatory quality, and control of corruption has created a disabling environment that obstructs the effective implementation of corporate governance standards. Furthermore, despite the existence of mandatory local frameworks—such as the 2010 Corporate Governance Manual for Banks—there is a significant lack of commitment from institutional management. The failure of internal control systems and the absence of transparency have allowed for administrative biases and widespread corruption. These factors combined have led to a marked decline in sustainable development rates and discouraged both domestic and foreign investments. The paper concludes that achieving economic, social, and environmental welfare in Libya is intrinsically linked to structural reforms in macro-governance and the genuine activation of accountability mechanisms.