Growth, history, or institutions

Abstract

This article explores the empirical determinants of state fragility in sub-Saharan Africa over the 1992–2007 period. Our dataset includes those sub-Saharan countries for which we have information on the distribution by quintiles of the World Bank Country Policy and Institutional Assessment (CPIA) ratings. We evaluate the potential influence on fragility of a wide range of economic, institutional, and historical variables. Among economic factors, we consider per-capita GDP, both in levels and growth rates, investment, natural resources, and schooling. We also consider economic policy variables such as government expenditures, trade openness, and inflation. Demographic forces are accounted for through the fertility rate, life expectancy, and the youth bulge. Institutional factors are captured by measures of ethnic fractionalization, civil liberties, revolutions, and conflicts, as well as governance indicators. Moreover, we select historical variables that reflect the colonial experience of the region, namely the national identity of the colonizers and the political status during the colonial period. Finally, we account for geographic factors such as latitude, access to sea, and the presence of fragile neighbors. Our central findings is that institutions are the main determinants of fragility: even after controlling for reverse causality and omitted variable bias, the probability for a country to be fragile increases with restrictions of civil liberties and with the number of revolutions. Before controlling for endogeneity, economic factors such as per-capita GDP growth and investment show some explanatory power, but economic prosperity displays a contradictory net impact since growth reduces fragility while investment facilitates it. Moreover, instrumental variables estimates show that per-capita GDP growth is no longer a significant factor. Colonial variables display a marginal residual influence: after controlling for all other factors former colonies are actually associated with a lower probability of being fragile.

Institutional Quality and Income Inequality in Developing Countries: A Dynamic Panel Threshold Analysis

“…This confirms our claim that the introduction of public sector reforms and structural adjustment policies that eliminated bureaucracy and reduced procurement breaches in the public sector had significant impact on the institutional environment in the developing world. We do not neglect the argument of prior studies on the choice of governance indicators as most institutional quality measures are 'subjective' and based on expert assessment and opinions that may be biased (see Knack and Keefer, 1995). also, there is a concern among prior studies over the comparability of the WBgI governance indicators overtime and across countries (Bardhan, 2008).…”

“…Studies that found such relationships have largely focused on the corruption-inequality nexus due to compounding cases of corruption over the last three decades (andres and Ramlogan-Dobson, 2011;gyimah-Brempong, 2002;gyimah-Brempong and Camacho, 2006). Contemporary studies, however, point out that weak institutional factors such as government ineffectiveness and absence of the rule of law could contribute to deterioration in the income distributions of developing countries ( acemoglu et al, 2001;Chong and gradstein, 2007;Knack and Keefer, 1995). These studies demonstrate that institutional quality, notwithstanding the rule of law and government effectiveness, is imperative for economic growth, which is also necessary for poverty alleviation and the distribution of economic benefits across the social and economic ladder's various levels (Dollar and Kraay, 2003).…”

Poverty, Insecurity, and Climate Change Stare at the EU-AU Relations

“…Poverty reduction efforts in the continent were marred by political, environmental, climatic, economic and institutional fragilities (Beegle et al, 2016;Bertocchi & Gerzoni, 2012;Bicaba et al, 2015;Folarin & Adeniyi, 2020;HoefÒer, 2019). Conflicts and political instability encouraged it.…”

CSR information, environmental awareness and CSR diffusion in SMEs of Angola

“…Throughout the twentieth century, several African countries had to deal with long periods of civil war and conflict, with the continent's mineral resourcesparticularly crude oil and diamondsbeing used to finance these activities (Bertocchi and Guerzoni, 2012). These conflicts have not only prevented several generations from attaining an adequate standard of living, access to education and medical and social assistance, but have also adversely affected the existing infrastructure and thus hindered economic development (Akresh et al, 2012;Asare et al, 2021).…”