There are wide discussions on the causes of the differences in the economic performance. Recent studies have stressed out the crucial role of institutions – formal and informal constraints that shape human interaction. The aim of this article is to evaluate the influence of governance – traditions and institutions by which authority in a country is exercised –on the socioeconomic development. To measure the level of governance we used World Bank’s Worldwide Governance Indicators and such indicators as GDP per capita, unemployment, life expectancy at birth, public expenditure, school enrolment (tertiary) and GINI index. The analysis was done by calculating correlation and regression coefficients. It covers up to 202 countries on the world scale and 34 countries on the European scale. The results of the analysis approve that governance plays an important role in state’s socioeconomic performance. Investments in the governance and especially government effectiveness will bring socioeconomic benefits to the state and its inhabitants.