Finance and Democracy in Africa

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThis paper focuses on how political regimes affect financial development in Africa, contingent on religious-domination, income-levels and colonial-legacies. The main findings are summarized as follows. Authoritarian regimes have a higher propensity to effect policies that favour the development of financial intermediary depth, activity and size. Democracy has important effects on the degree of competition for public offices but less significant effects in comparison with autocracy on policies towards financial development. As a policy implication, once democracy is initiated, it should be accelerated (to edge the appeals of authoritarian regimes) and reap the benefits of level and time hypotheses in financial development.

How Has Politico-Economic Liberalization Affected Financial Allocation Efficiency? Fresh African Evidence

“…Conversely, the effect of democracy cannot be too apparent because elections are multi-annual; hence, it is not directly linked to financial development. Another explanation that is consistent with recent finance-democracy literature is the time and level hypothetical benefits of democracy in financial development (Asongu, 2011b). According to Asongu, democracy in Africa has important effects on the degree of competition for public offices but less significant effects in comparison with autocracy on policies of financial development because, democracies in the continent are young (time hypothesis) and weak (level hypothesis).…”

Dynamic openness and finance in Africa

“…The time and level hypothetical benefits of democracy (discussed in the introduction) have been confirmed in the literature. Asongu (2014b) has concluded that democracy in Africa has important effects on the degree of competition for public offices but less significant effects in comparison with autocracy on policies of financial development. This essentially because, democracies in the continent are young (time hypothesis) and weak (level hypothesis).…”

“…This is the case with many developing countries in Africa (Lemarchand, 1972;Asongu, 2014b), Southeast Asia (Scott, 1972), India (Wade, 1985) and Turkey (Sayari, 1977). It is also the case of post-communist Russia (Varsee, 1997) and many Latin American countries after waves of democratization (Weyland, 1998).…”

Enhancing Governance for Environmental Sustainability in Sub-Saharan Africa

“…It is important to note that the study is recommending that these governance measures should be substantially increased in the sub-region because the unexpected findings could be traceable to the inability of countries in SSA to gain from the time and level hypotheses related to the favourable effects of good governance which, have been independently tested to confirm the existence of a non-linear nexus between democracy and governance quality in developing countries (Sung, 2004;Asongu, 2014). Concerning the level of democracy hypothesis, it has been established that governance quality is highest in states where democracy is strong, average in authoritarian states and least in partly democratised states (Sung, 2004;Back & Hadenius, 2008;Asongu & Nwachukwu, 2016e).…”