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Structural breaks, institutional quality and productivity growth in Sub-Saharan Africa

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  • Adu-Darko, Eunice
  • You, Kefei

Abstract

This paper examines the effect of institutional quality on total factor productivity (TFP) growth in 31 Sub-Saharan African economies during 1986–2019. Institutional quality, based on Rodrik's (2000) concept of market-supporting institutions aligned with the African Union's Agenda 2063, influences TFP growth alongside exogenous technological progress. We account for multiple structural breaks adopting the Karavias et al. (2022) method. Incorporating the three significant structural breaks identified in 1993, 2002, and 2007, institutional quality consistently contributed to TFP growth during 1986–1993, 1994–2002, and 2003–2007. It had no impact during 2008–2019. Despite institutional quality's support, regional TFP declined during 1986–1993 due to negative technological progress. It grew slowly in 1994–2002 and accelerated its pace during 2003–2007, both powered entirely by enhancements in institutional quality. In 2008–2019, driven by the final ignition of positive technological progress, TFP continued to grow but at a slower rate due to the absence of contribution from institutional quality.

Suggested Citation

  • Adu-Darko, Eunice & You, Kefei, 2025. "Structural breaks, institutional quality and productivity growth in Sub-Saharan Africa," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 40-60.
    • Handle: RePEc:eee:streco:v:74:y:2025:i:c:p:40-60
    DOI: 10.1016/j.strueco.2025.03.003
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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