This research examines the role of economic corridors, specifically the International North–South Transport Corridor (INSTC), in addressing governance disparities between nations with differing institutional strengths. The study investigates whether such corridors can effectively reduce the “governance gap,” which complicates and increases the costs of cross-border trade. Using the trade-to-GDP ratio as a proxy for economic corridor impact and the Worldwide Governance Indicators (WGI) to measure governance gaps, six key metrics were analyzed: “Voice and Accountability,” “Political Stability,” “Government Effectiveness,” “Regulatory Quality,” “Rule of Law,” and “Control of Corruption.” Data from 2002 to 2022 for 13 INSTC members were subjected to panel bi-directional Granger causality analysis. Findings suggest that the INSTC has significant potential to improve governance dynamics among its members, contributing to the reduction of governance disparities and facilitating trade.