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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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