Institutions and economic growth in Sub-Saharan Africa: a panel data analysis

Abstract

Over the last three decades or so, there has been a considerable debate on factors that explaining economic growth in Sub-Saharan African (SSA) countries. The conventional determinants of economic growth, such as, economic policies, investment in human capital and foreign flow of private capital have been received a great attention in the literature. Nevertheless, the role of institutions in stimulating growth still has not been adequately studied. This study, therefore, aims at investigating the relationship between institutional quality and economic growth in 20 SSA countries over the period 1985–2007. The empirical results show that the institutional quality, in terms of low corruption, rule of law and efficient bureaucratic has positive impact on economic growth in SSA countries. Moreover, the study revealed that the institutional quality in British colonies has a significant impact on growth, while in the case of French colonies the impact is found to be insignificant.