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Determinants of Institutional Quality in Sub-Saharan African Countries

  • Siba, Eyerusalem G.

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

In this study, a number of factors have been considered as potential determinants of institutional quality in Sub- Saharan African countries. The empirical analysis has shown that historical factors such as state legitimacy determine the quality of current institutions in the region. Foreign aid dependence is found to erode quality of governance as measured by rule of law. Variability of aid is found to counterbalance the destructive nature of high level of aid dependence. However, the last result is not retained in the robust regression analysis performed. Countries with strong political constraints on the ruling elites, proxied by checks and balances between executive and legislative branches of governments, and press freedom, are found to have better quality of institutions. Large countries and those closer to equator are disadvantaged in their success of building better quality institutions. Unlike the popular discussions, ethnic fractionalization and identity of last coloniser do not explain variations in institutional quality in the region. The paper also devotes a section for a case study of Ethiopian institutional development to complement the cross country analysis by adding cultural, historical and political specificities.

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File URL: http://hdl.handle.net/2077/10382
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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 310.

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Length: 32 pages
Date of creation: 19 Jun 2008
Date of revision:
Handle: RePEc:hhs:gunwpe:0310
Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/

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  1. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  2. Bardhan, Pranab, 1999. "Institutions, Governance and Political Economy of Development: Some Reflections," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(0), pages 149-67, December.
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