7. Does governance explain growth? An empirical analysis on African countries

• In the discourse of development economics, it is argued that the quality of governance can play a central role for the economic growth. Literature in this area is extensive and many scholars have deeply investigated the importance of governance to explain why most of the developing countries have a weak economic performance. The present work investigates the impact of governance quality on per capita GDP (gross domestic product) growth for 45 African countries using World Bank data. Governance is expressed by six different proxy indicators called World Governance Indicators (WGI). In addition to Governance Indicators, other variables such as measures of primary school enrolment, degree of openness to trade, capital, foreign direct investment (FDI), and government expenditure as the control variables are used for a relatively long period of time, 2002 to 2021. We apply Generalized Method of Moments (GMM) as econometric method to estimate our model. The findings suggest that government effectiveness, rule of law, and regulatory quality and corruption are governance measures that influence economic growth. 

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

Governance

Economic growth

African countries

World Governance Indicators (WGI)

Näringsliv och samhälle

Näringsliv och samhälle

Publication and Content Type

ref (subject category)

kap (subject category)