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Unbundling Legal Institutions That Matter for Inclusive Growth in Sub‐Saharan Africa

Author

Listed:
  • Ebenezer Boateng
  • John G. Gatsi
  • Mac Abeka Junior
  • Michael Owusu Appiah
  • Nathaniel Kwapong Obuobi
  • Emmanuel Kwakye Amoah

Abstract

The consensus among academics and policymakers is that countries in Sub‐Saharan Africa (SSA) must pursue policies aimed at promoting inclusive growth to have the needed impact on minimizing income inequality and reducing poverty. However, there are ambiguities in the literature regarding the main factors that can elicit the participation of poor and marginalized groups in the growth process. This thesis extends the arguments of the new institutional economics and law and finance theory to examine the roles of legal institutions in promoting inclusive growth in SSA. Using data from 2007 to 2018, and after having controlled for endogeneity bias with the two‐step system generalized method of moments (GMM), we find evidence to support the hypothesis that strengthening the overall quality of legal institutions (rule of law) enhances inclusive growth in the region. Further, we document a significant positive influence of disaggregated measures of judicial independence, reliability of police, cost of enforcing contracts, and legal procedures in settling disputes on inclusive growth. However, our findings reveal that strengthening creditor rights protection and property rights protection harms inclusive growth in the region. Therefore, seeking to enhance equitable access to social and economic opportunities, our findings call for SSA countries to strengthen the quality of their legal framework. By unbundling the legal framework of the countries, our findings also provide pertinent inferences for policymakers on which institution‐specific aspects of the legal framework are vital for promoting inclusive growth in the region. 学术界和政策制定者的共识是, 撒哈拉以南非洲(SSA)国家必须推行一系列旨在促进包容性增长的政策, 才能对“最大程度减少收入不平等和减贫”产生影响。然而, 文献中尚不清晰的是, 哪些主要因素能引起贫困群体和边缘化群体参与增长过程。本论文扩展了新制度经济学和法律与金融理论的论点, 以研究法律制度在“促进SSA包容性增长”一事中的作用。通过使用2007年至2018年的数据, 并在使用两步骤系统广义矩方法(GMM)控制内生性偏差后, 我们发现证据支持以下假设:加强法律制度 (法治) 的整体质量能促进该地区的包容性增长。此外, 我们记录了司法独立性、警察可靠性、执行合同的成本和法律程序等分解指标在“解决包容性增长纠纷”方面具有显著的积极影响。然而, 我们的研究结果表明, 加强债权人权利保护和财产权保护会损害该地区的包容性增长。因此, 为了提高社会和经济机会的公平获取, 我们的研究结果呼吁撒哈拉以南非洲国家加强其法律框架的质量。通过解析各国的法律框架, 我们的研究结果还为政策制定者提供了中肯的推论, 即法律框架的哪些制度特定方面对于促进该地区的包容性增长至关重要。 El consenso entre académicos y formuladores de políticas es que los países del África subsahariana (ASS) deben implementar políticas destinadas a promover el crecimiento inclusivo para tener el impacto necesario en la minimización de la desigualdad de ingresos y la reducción de la pobreza. Sin embargo, existen ambigüedades en la literatura sobre los principales factores que pueden provocar la participación de los grupos pobres y marginados en el proceso de crecimiento. Esta tesis extiende los argumentos de la nueva economía institucional y la teoría del derecho y las finanzas para examinar los roles de las instituciones legales en la promoción del crecimiento inclusivo en el África subsahariana. Utilizando datos de 2007 a 2018, y después de haber controlado el sesgo de endogeneidad con el método generalizado de momentos (GMM) del sistema de dos pasos, encontramos evidencia para apoyar la hipótesis de que el fortalecimiento de la calidad general de las instituciones legales (estado de derecho) mejora el crecimiento inclusivo en la región. Además, documentamos una influencia positiva significativa de las medidas desagregadas de independencia judicial, confiabilidad de la policía, costo de cumplimiento de contratos y procedimientos legales en la resolución de disputas sobre el crecimiento inclusivo. Sin embargo, nuestros hallazgos revelan que el fortalecimiento de la protección de los derechos de los acreedores y de los derechos de propiedad perjudica el crecimiento inclusivo en la región. Por lo tanto, en un esfuerzo por mejorar el acceso equitativo a las oportunidades sociales y económicas, nuestros hallazgos instan a los países del África subsahariana a fortalecer la calidad de su marco legal. Al desagregar el marco legal de los países, nuestros hallazgos también brindan inferencias pertinentes para los responsables de las políticas sobre qué aspectos específicos de cada institución del marco legal son vitales para promover el crecimiento inclusivo en la región.

Suggested Citation

  • Ebenezer Boateng & John G. Gatsi & Mac Abeka Junior & Michael Owusu Appiah & Nathaniel Kwapong Obuobi & Emmanuel Kwakye Amoah, 2025. "Unbundling Legal Institutions That Matter for Inclusive Growth in Sub‐Saharan Africa," Poverty & Public Policy, John Wiley & Sons, vol. 17(1), March.
    • Handle: RePEc:wly:povpop:v:17:y:2025:i:1:n:e70001
    DOI: 10.1002/pop4.70001
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