Institutional quality and economic growth in Sub-Saharan Africa: a panel data approach

Hussen, Mohammed Seid

doi:10.1108/jed-11-2022-0231

Cited by 18 publications

(9 citation statements)

References 76 publications

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“…From the fixed effects and random effects methods of estimation utilized in the study, they found that institutional quality has a positive impact on the economic growth of East African countries. Their study strictly recommended the improvement in institutional quality in East Africa [ 2 , 3 , 53 ].…”

Section: Reviews Of Related Literaturementioning

confidence: 99%

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Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Ayana,

Demissie,

Sore

2023

PLoS ONE

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Following the approval of sustainable development goals at the global level, the link between fiscal policy, institutional quality, and economic growth has attracted special attention in economic literature. This study scrutinizes the effect of government revenue-institutional quality interaction on the economic growth of 43 Sub-Saharan Africa countries for the period of 2012–2022. Methodology-wise, the study employed the System Generalized Method of Moment (SGMM) to analyze the panel data gained from dependable data sources; the World Development Indicator and the Heritage Economic Freedom Index. The novelty of this study emanates from the estimation technique designated and the introduction of revenue-institutional quality into the economic growth model of SSA. The result of the study reveals that government revenue adversely affects economic growth while institutional quality positively enhances economic growth before interacting with each other. However, the interactive coefficient of government revenue and economic growth positively affected the real GDP growth rate of SSA countries over the study periods. Precisely, before interacting with institutional quality, a percentage change in government revenue, keeping all other things constant, leads to a 0.0866 percent decline in economic growth while it marks a 0.2329 percent upsurge in economic growth in the presence of institutional quality. The result of the study further shows that government revenue promotes the economic growth of the region when combined with institutional quality. On the other hand, foreign direct investment and openness to trade were the key sources of economic growth whereas the population growth rate adversely impacted economic growth in SSA countries. The policy implication of the study is that SSA needs to strengthen government revenue management. Further, the finding of the study implies that SSA countries need to improve institutional quality through promoting efficiency of the regulatory quality and the size of the SSA governments. In addition to this, the fast real GDP growth rate of SSA countries demands improved institutional quality indicators such as the rule of law and extended access to the open market.

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Section: Reviews Of Related Literaturementioning

confidence: 99%

“…In Africa, the link between fiscal policy variables, institutional quality, and economic growth become the focus of policy makers following agenda 2063. Consequently, several empirical studies linked intuitional quality and growth in SSA countries and reported a positive relationship [ 2 , 3 ].…”

Section: Introductionmentioning

confidence: 99%

Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Ayana,

Demissie,

Sore

2023

PLoS ONE

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“…In SSA, 45-50% of the population is impoverished (Solarin et al, 2021;Osinubi, 2005). More people live in abject poverty on the continent than on any other continent on the planet (Hussen, 2023;Solarin et al, 2021;Ndlovu and Toerien, 2020). Over the last few decades, SSA has remained the only region on the planet to see an increase in extreme poverty (Olaoye and Zerihun, 2023;Alpay, 2007).…”

Section: Introductionmentioning

confidence: 99%

“…In SSA, 45–50% of the population is impoverished (Solarin et al ., 2021; Osinubi, 2005). More people live in abject poverty on the continent than on any other continent on the planet (Hussen, 2023; Solarin et al. , 2021; Ndlovu and Toerien, 2020).…”

Section: Introductionmentioning

confidence: 99%

Inflation-poverty causal nexus in sub-Saharan African countries: an asymmetric panel causality approach

Olaniyi,

Odhiambo

2024

ITPD

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PurposeThis study examines the roles of cross-sectional dependence, asymmetric structure and country-to-country policy variations in the inflation-poverty reduction causal nexus in selected sub-Saharan African (SSA) countries from 1981 to 2019.Design/methodology/approachTo account for cross-sectional dependence, heterogeneity and policy variations across countries in the inflation-poverty reduction causal nexus, this study uses robust Hatemi-J data decomposition procedures and a battery of second-generation techniques. These techniques include cross-sectional dependency tests, panel unit root tests, slope homogeneity tests and the Dumitrescu-Hurlin panel Granger non-causality approach.FindingsUnlike existing studies, the panel and country-specific findings exhibit several dimensions of asymmetric causality in the inflation-poverty nexus. Positive inflationary shocks Granger-causes poverty reduction through investment and employment opportunities that benefit the impoverished in SSA. These findings align with country-specific analyses of Botswana, Cameroon, Gabon, Mauritania, South Africa and Togo. Also, a decline in poverty causes inflation to increase in the Congo Republic, Madagascar, Nigeria, Senegal and Togo. All panel and country-specific analyses reveal at least one dimension of asymmetric causality or another.Practical implicationsAll stakeholders and policymakers must pay adequate attention to issues of asymmetric structures, nonlinearities and country-to-country policy variations to address country-specific issues and the socioeconomic problems in the probable causal nexus between the high incidence of extreme poverty and double-digit inflation rates in most SSA countries.Originality/valueStudies on the inflation-poverty nexus are not uncommon in economic literature. Most existing studies focus on inflation’s effect on poverty. Existing studies that examine the inflation-poverty causal relationship covertly assume no asymmetric structure and nonlinearity. Also, the issues of cross-sectional dependence and heterogeneity are unexplored in the causal link in existing studies. All panel studies covertly impose homogeneous policies on countries in the causality. This study relaxes this supposition by allowing policies to vary across countries in the panel framework. Thus, this study makes three-dimensional contributions to increasing understanding of the inflation-poverty nexus.

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“…It is one of the instruments of achieving macroeconomic objectives such as controlling the level of inflation and unemployment. Furthermore, government revenue is considered a tool for enhancing social justice and poverty alleviation [ 6 , 7 ].…”

Section: Introductionmentioning

confidence: 99%

On the government revenue on economic growth of Sub-Saharan Africa: Does institutional quality matter?

Ayana,

Demissie,

Sore

2024

Heliyon

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Institutional quality and economic growth in Sub-Saharan Africa: a panel data approach

Cited by 18 publications

References 76 publications

Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Inflation-poverty causal nexus in sub-Saharan African countries: an asymmetric panel causality approach

On the government revenue on economic growth of Sub-Saharan Africa: Does institutional quality matter?

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