IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article

The role of institutions in economic development: Evidence from 27 Sub-Saharan African countries

  • Rasha Hashim Osman
  • Constantinos Alexiou
  • Persefoni Tsaliki

Purpose – The purpose of this paper is to explore the alleged link between institutional quality and economic performance in 27 Sub-Saharan Africa (SSA) countries during the period 1984-2003. Design/methodology/approach – Four institutions' quality indicators, namely government stability, corruption, ethnic tensions and socioeconomic conditions, along with other control and policy variables, are employed in a panel data analysis. Findings – The institutional variables assume a key role in the process of economic development whereas the control variables display a limited effect. Thus, the “conventional variables” of economic theory may not be able to fully explain the SSA experience. Research limitations/implications – Future research efforts should explore how the vast changes experienced by the countries in that region influenced their economic evolution during the last decades. Practical implications – Policy makers should primarily focus on improving institutional quality, which is likely to positively affect economic performance in SSA countries. Social implications – Improving institutional infrastructure (enhancing rule of law and quality regulation, improving contract enforcement, securing property rights and reducing uncertainty) play a key role in delivering long-run economic development and social prosperity. Originality/value – The paper analyzes the impact of institutional quality on economic performance using data from 27 SSA countries.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.emeraldinsight.com/journals.htm?issn=0306-8293&volume=39&issue=1/2&articleid=17012699&show=abstract
Download Restriction: Cannot be freely downloaded

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Emerald Group Publishing in its journal International Journal of Social Economics.

Volume (Year): 39 (2012)
Issue (Month): 2 (January)
Pages: 142-160

as
in new window

Handle: RePEc:eme:ijsepp:v:39:y:2012:i:2:p:142-160
Contact details of provider: Web page: http://www.emeraldinsight.com

Order Information: Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Web: http://www.emeraldinsight.com/ijse.htm Email:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  2. Bertocchi, Graziella & Canova, Fabio, 1996. "Did Colonization Matter for Growth? An Empirical Exploration into the Historical Causes of Africa's Underdevelopment," CEPR Discussion Papers 1444, C.E.P.R. Discussion Papers.
  3. Scully, Gerald W, 1988. "The Institutional Framework and Economic Development," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 652-62, June.
  4. Paul Collier & Jan Willem Gunning, 1997. "Explaining African economic performance," CSAE Working Paper Series 1997-02.2, Centre for the Study of African Economies, University of Oxford.
  5. Bourguignon, Francois & Verdier, Thierry, 2000. "Oligarchy, democracy, inequality and growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 285-313, August.
  6. John W. Dawson, 2001. "Causality in the Freedom-Growth Relationship," Working Papers 01-04, Department of Economics, Appalachian State University.
  7. Veselin Vukotić & Maja Baćović, 2006. "Economic Freedom and Economic Growth in South East Europe," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 13(1), pages 81-91, 05.
  8. Thorsten Beck & Ross Levine & Norman Loayza, 1999. "Financial Intermediation and Growth: Causality and Causes," Working Papers Central Bank of Chile 56, Central Bank of Chile.
  9. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
  10. Léonce Ndikumana & Sher Verick, 2008. "The Linkages Between FDI and Domestic Investment: Unravelling the Developmental Impact of Foreign Investment in Sub-Saharan Africa," Development Policy Review, Overseas Development Institute, vol. 26(6), pages 713-726, November.
  11. Léonce Ndikumana, 2006. "Corruption and Pro-Poor Growth Outcomes: Evidence and Lessons for African Countries," Working Papers wp120, Political Economy Research Institute, University of Massachusetts at Amherst.
  12. Barro, Robert J, 1996. "Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
  13. Brunt, Liam, 2007. "Property Rights and Economic Growth: Evidence from a Natural Experiment," CEPR Discussion Papers 6404, C.E.P.R. Discussion Papers.
  14. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  15. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  16. Savvides, Andreas, 1995. "Economic growth in Africa," World Development, Elsevier, vol. 23(3), pages 449-458, March.
  17. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," NBER Working Papers 10568, National Bureau of Economic Research, Inc.
  18. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc.
  19. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1167-1199.
  20. Svensson, Jakob, 1998. "Investment, property rights and political instability: Theory and evidence," European Economic Review, Elsevier, vol. 42(7), pages 1317-1341, July.
  21. Emmanuel Anoruo & Yusuf Ahmad, 2001. "Causal Relationship between Domestic Savings and Economic Growth: Evidence from Seven African Countries," African Development Review, African Development Bank, vol. 13(2), pages 238-249.
  22. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  23. Ojo, Oladeji & Oshikoya, Temitope, 1995. "Determinants of Long-Term Growth: Some African Results," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 4(2), pages 163-91, October.
  24. Carmen M. Reinhart & Ioannis Tokatlidis, 2003. "Financial Liberalisation: The African Experience," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(Supplemen), pages 53-88, September.
  25. Daniel Kaufmann & Shang-Jin Wei, 2000. "Does 'Grease Money' Speed Up the Wheels of Commerce?," IMF Working Papers 00/64, International Monetary Fund.
  26. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  27. Shang-Jin Wei, 1997. "How Taxing is Corruption on International Investors?," NBER Working Papers 6030, National Bureau of Economic Research, Inc.
  28. Kaufman, Daniel & Shang-Jin Wei, 1999. "Does"grease money"speed up the wheels of commerce?," Policy Research Working Paper Series 2254, The World Bank.
  29. Nelson, Michael A & Singh, Ram D, 1994. "The Deficit-Growth Connection: Some Recent Evidence from Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 43(1), pages 167-91, October.
  30. Mark Gradstein & Branko Milanovic & Yvonne Ying, 2001. "Democracy and Income In-Equality: An Empirical Analysis," CESifo Working Paper Series 411, CESifo Group Munich.
  31. Butkiewicz, James L. & Yanikkaya, Halit, 2006. "Institutional quality and economic growth: Maintenance of the rule of law or democratic institutions, or both?," Economic Modelling, Elsevier, vol. 23(4), pages 648-661, July.
  32. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
  33. Easterly, William, 2000. "the middle class consensus and economic development," Policy Research Working Paper Series 2346, The World Bank.
  34. Mo, Pak Hung, 2000. "Income Inequality and Economic Growth," Kyklos, Wiley Blackwell, vol. 53(3), pages 293-315.
  35. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January.
  36. A. Chong & C. Calderón, 2000. "Causality and Feedback Between Institutional Measures and Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 69-81, 03.
  37. Gyimah-Brempong, Kwabena & Traynor, Thomas L, 1999. "Political Instability, Investment and Economic Growth in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(1), pages 52-86, March.
  38. Črt Kostevc & Tjaša Redek & Andrej Sušjan, 2007. "Foreign Direct Investment and Institutional Environment in Transition Economies," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 14(1), pages 40-54, May.
  39. Charles Adjasi & Nicholas Biekpe, 2006. "Stock Market Development and Economic Growth: The Case of Selected African Countries," African Development Review, African Development Bank, vol. 18(1), pages 144-161.
  40. Ndikumana, Leonce, 2000. "Financial Determinants of Domestic Investment in Sub-Saharan Africa: Evidence from Panel Data," World Development, Elsevier, vol. 28(2), pages 381-400, February.
  41. Kevin Sylwester, 2002. "Democracy and Changes in Income Inequality," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 167-178, August.
  42. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eme:ijsepp:v:39:y:2012:i:2:p:142-160. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.