Impact of institutional quality on economic performance of Eastern Africa: a panel data analysis

Abera, Fikadu; Mulugeta, Wondaferahu; Melaku, Tesfaye

doi:10.22437/ppd.v7i2.7863

Cited by 9 publications

(11 citation statements)

References 17 publications

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“…More specifically, the average contribution of composite governance factor on GDP is about 3.05% implying that a one-point improvement in the CGI raises GDP by about 3.05%. Even if the magnitudes may differ, the results are consistent with most empirical findings (Anh et al, 2020;Paitoon, 2020;Fikadu et al, 2019;Abdullahi et al, 2019;Salawu et al, 2108;Kilishi et al, 2013).…”

Section: Econometric Results and Discussionsupporting

confidence: 87%

“…A study by Fikadu et al (2019) examined the impact of institutional quality on the economic performance of 14 Eastern African countries using panel data between 2005 and 2016. According to their finding, the poor economic performance of African countries is Governance quality, economic growth linked to their weak institutional quality.…”

Section: Jeas 402mentioning

confidence: 99%

“…A study by Fikadu et al. (2019) examined the impact of institutional quality on the economic performance of 14 Eastern African countries using panel data between 2005 and 2016.…”

Section: Review Of Literaturementioning

confidence: 99%

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Governance quality and economic growth in Sub-Saharan Africa: the dynamic panel model

Bedemo

2022

JEAS

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PurposeThe main objective of this article is to analyze the role of governance quality in influencing the economic growth of 22 selected Sub-Saharan African Countries.Design/methodology/approachThe study applied the panel dynamic Generalized Method of Moments (GMM) to analyze the data obtained from the World Bank database over the period from 2002 to 2020.FindingsThe overall finding indicated that the composite governance index has a positive significant effect on the economic growth of the countries; where a unit improvement in the aggregate governance index leads to a 3.05% increase in GDP. The disaggregated result has shown that corruption control and government effectiveness have a negative significant effect on growth performance, whereas, the rule of law and regulatory quality showed a positive significant effect. Political stability and voice and accountability have an insignificant effect on economic growth.Research limitations/implicationsDue to data limitations, this study could not address the whole members of Sub Sahara African Countries and could not see the causal relationship.Practical implicationsThe study suggested a strong commitment to the implementation of policy and reform measures on all governance factors. This may add to the need to devise participatory corruption control mechanisms; to closely look at the proper implementation of policies and reforms that constitute the government effectiveness factors, and properly implement the rule of law at all levels of the government with a strong commitment to realizing it so that citizens at all levels can have full confidence in and abide by the rules of society.Originality/valueEven though there are some studies conducted using conventional methods of panel data analysis such as random effect or fixed effects, this empirical study used more advanced panel dynamic generalized moment of methods to examine the role of improvement in governance quality on economic growth.

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Section: Econometric Results and Discussionsupporting

confidence: 87%

Section: Jeas 402mentioning

confidence: 99%

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Governance quality and economic growth in Sub-Saharan Africa: the dynamic panel model

Bedemo

2022

JEAS

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“…Using static panel regression , Masaki and Walle (2014) found that level democracy is positively associated with economic growth in SSA countries that have remained democratic for longer periods of time. Using robust estimation of system GMM, Fikadu et al (2019) found that Eastern African economies could not explained by political institution, considering level of democracy (Polity2) as proxy.…”

Section: Empirical Literaturementioning

confidence: 99%

“…The other studies found a negative relationship between democratic institutions and economic development (Abeyasinghe, 2004;Aisen and Jos e, 2013;Iqbal and Daly, 2014;Kurzman et al, 2002;Tavares and Wacziarg, 2001). Additionally, an increasing number of study established the weaker and ineffective role of the institution on economic performance in Africa (Asfaw and Mbeche, 2006;Effiong, 2015;Rachdi and Saidi, 2015;Fikadu et al, 2019), particularly Sub-Saharan African (SSA). Region institutional environments are affected by poor enforcement of the rule of law, corruption, mismanagement, absence of strong civil society and political interference.…”

Section: Introductionmentioning

confidence: 99%

Political institutions and economic performance in Ethiopia: an auto regressive distributed lag bound approach to co-integration

Garedow¹

2021

JED

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PurposeThe main objective of this study is to examine how political institutions affect economic performance in Ethiopia over the 1980–2019 time periods.Design/methodology/approachMainly, the impact of political institution indicators including, level of democracy, political violence, democratic accountability and regime durability have been examined using auto regressive distributed lag (ARDL) bound test approach to co-integration and the error correction model.FindingsThis study confirms that level of democracy and democratic accountability has an adverse long effect on the economic performance of Ethiopia. On the other hand, political violence has a negative short-run causal effect on economic performance in Ethiopia. The study concluded that the deterioration of political institutions harmfully affected economic performance in Ethiopia.Practical implicationsGovernment policymakers should primarily pay attention to promoting and changing those political institutions that harm economic performance. Additionally, better management of political violence has important implications for fostering the economic performance of Ethiopia.Originality/valueOriginality: This study provides some valuable evidence on the nexuses between political institutions and economic performance in Ethiopia. Likely, this is the first investigation on the subject under the consideration to use time analysis and will vigorously contribute to the literature as well by employing the ADRL bound test. Previous studies have examined the impact of the institution on economic growth on a cross-country basis. Further analysis is required to understand the effects of institutions such as level of democracy, political violence and democratic accountability on economic development.

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The effect of institutional quality on agricultural value added in East Africa

Gelgo,

Gemechu,

Bedemo

2023

Heliyon

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Impact of institutional quality on economic performance of Eastern Africa: a panel data analysis

Cited by 9 publications

References 17 publications

Governance quality and economic growth in Sub-Saharan Africa: the dynamic panel model

Governance quality and economic growth in Sub-Saharan Africa: the dynamic panel model

Political institutions and economic performance in Ethiopia: an auto regressive distributed lag bound approach to co-integration

The effect of institutional quality on agricultural value added in East Africa

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