The Impact of Governance on Economic Growth: Further Evidence for Africa
AbstractSub-Sahara African countries have had a checkered past when it comes to good governance and good institutions. Increasingly, economists and policy makers are recognizing the importance of good governance and institutions for economic growth and development. The New Partnership for Africa’s Development (NEPAD) which was initiated by the African Heads of State and endorsed by the G8 countries including the European Union, Japan, and China in October 2001 has four main goals: eradicating poverty, promoting sustainable growth and development, integrating Africa into the world economy, and accelerating the empowerment of women. The NEPAD objectives are based on the underlying principles of a commitment to good governance, democracy, human rights and conflict resolution, and the recognition that the maintenance of these standards is fundamental to the creation of an environment conducive to investment and long-term economic growth. The objective of this paper is to investigate the role of governance in explaining the sub-optimal economic growth performance of African economies while controlling for the conventional sources of growth. Our results suggest that good governance or lack thereof contributes to the gaps in income per capita between richer and poorer African countries. Furthermore, our results indicate that the role of governance on economic growth depends on the type and the level of income growth of countries under consideration.
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Bibliographic InfoPaper provided by Middle Tennessee State University, Department of Economics and Finance in its series Working Papers with number 201012.
Date of creation: Dec 2010
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Web page: http://www.mtsu.edu/~berc/working/Economics_Working_Papers.html
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Workers’ Remittances; Economic Growth; Panel Data; Arellano-Bond; Quantile Regression; Sub-Saharan Africa;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
- NEP-DEV-2010-12-18 (Development)
- NEP-FDG-2010-12-18 (Financial Development & Growth)
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