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State Business Relations and Economic Growth in Sub-Saharan Africa

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  • Kunal Sen
  • Dirk Te Velde

Abstract

This paper contributes to the literature on the determinants of economic growth in sub-Saharan Africa by examining the effect of effective state-business relations on economic growth for a panel of 19 sub-Saharan African countries for the period 1970-2004. We propose a measure that we argue captures the various dimensions of effective state-business relations in sub-Saharan Africa. We then estimate standard growth regressions using dynamic panel data methods with this measure, along with the more conventionally used measures of institutional quality such as degree of executive constraints, the rule of law, the degree of corruption and the quality of the bureaucracy. Our results show that effective state-business relations contribute significantly to economic growth - countries which have shown improvements in state-business relations have witnessed higher economic growth, controlling for other determinants of economic growth and independent of other measures of institutional quality.

Suggested Citation

  • Kunal Sen & Dirk Te Velde, 2009. "State Business Relations and Economic Growth in Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(8), pages 1267-1283.
  • Handle: RePEc:taf:jdevst:v:45:y:2009:i:8:p:1267-1283
    DOI: 10.1080/00220380902863307
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    References listed on IDEAS

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    1. Elsa V. Artadi & Xavier Sala-i-Martin, 2003. "The Economic Tragedy of the XXth Century: Growth in Africa," NBER Working Papers 9865, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Aryeetey Ernest & Owoo Nkechi, 2015. "Ghana.s experiments with business-government co-ordination," WIDER Working Paper Series 099, World Institute for Development Economic Research (UNU-WIDER).
    2. G. Alivelu & K. Srinivasulu & M. Gopinath Reddy, 2010. "State Business Relations and Performance of Manufacturing Sector in Andhra Pradesh," Governance Working Papers 22773, East Asian Bureau of Economic Research.
    3. repec:spr:epolit:v:34:y:2017:i:2:d:10.1007_s40888-017-0061-7 is not listed on IDEAS
    4. Calì, Massimiliano & Sen, Kunal, 2011. "Do Effective State Business Relations Matter for Economic Growth? Evidence from Indian States," World Development, Elsevier, vol. 39(9), pages 1542-1557, September.
    5. Kathuria, Vinish & Natarajan, Rajesh Raj & Sen, Kunal, 2010. "Does the institution of State Business Relations matter for Firm Performance? – A study of Indian Manufacturing," MPRA Paper 23053, University Library of Munich, Germany.
    6. Sam Hickey, 2012. "Thinking about the politics of inclusive development: towards a relational approach," Global Development Institute Working Paper Series esid-001-12, GDI, The University of Manchester.
    7. te Velde Dirk Willem & Lemma Alberto, 2015. "State-business relations as drivers of economic performance," WIDER Working Paper Series 098, World Institute for Development Economic Research (UNU-WIDER).
    8. Amendolagine, Vito & Boly, Amadou & Coniglio, Nicola Daniele & Prota, Francesco & Seric, Adnan, 2013. "FDI and Local Linkages in Developing Countries: Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 50(C), pages 41-56.
    9. Vinish, Kathuria & Seethamma Natarajan, Rajesh Raj & Sen, Kunal, 2010. "Rain, Rain, Go Away? The Investment Climate, State Business Relations and Firm Performance in India," MPRA Paper 20316, University Library of Munich, Germany.
    10. Kathuria, Vinish & Seethamma Natarajan, Rajesh Raj & Sen, Kunal, 2010. "State business relations and manufacturing productivity growth in India," MPRA Paper 20314, University Library of Munich, Germany.
    11. Gwatidzo, Tendai & Ojah, Kalu, 2014. "Firms’ debt choice in Africa: Are institutional infrastructure and non-traditional determinants important?," International Review of Financial Analysis, Elsevier, vol. 31(C), pages 152-166.

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