Is Per-Capita Growth in Africa Hampered by Poor Governance and Weak Institutions? Examining the Case of the ECOWAS Countries

Abstract

This paper is an empirical study suggesting that poor governance and weak institutions may be part of the explanations to the low performance of the Economic Community of West African States (ECOWAS) in terms of per-capita GDP. We use a beta-convergence model that includes governance indicators, in addition to the classical determinants of growth. The study relies on panel data over the period from 1995 to 2004 and we compare the estimates of the GLS and GMM estimators. We find a strong evidence that poor governance reflected by the rule of law, property rights, regulatory burden, political violence, government effectiveness impede the growth of per-capita revenue. We also discuss some case studies of countries adopting policies to strengthen their institutions.