The Impact of Governance on Economic Growth: Further Evidence for Africa

Bichaka Fayissa and Christian Nsiah

No 201012, Working Papers from Middle Tennessee State University, Department of Economics and Finance

Abstract: Sub-Sahara African countries have had a checkered past when it comes to good governance and good institutions. Increasingly, economists and policy makers are recognizing the importance of good governance and institutions for economic growth and development. The New Partnership for Africa’s Development (NEPAD) which was initiated by the African Heads of State and endorsed by the G8 countries including the European Union, Japan, and China in October 2001 has four main goals: eradicating poverty, promoting sustainable growth and development, integrating Africa into the world economy, and accelerating the empowerment of women. The NEPAD objectives are based on the underlying principles of a commitment to good governance, democracy, human rights and conflict resolution, and the recognition that the maintenance of these standards is fundamental to the creation of an environment conducive to investment and long-term economic growth. The objective of this paper is to investigate the role of governance in explaining the sub-optimal economic growth performance of African economies while controlling for the conventional sources of growth. Our results suggest that good governance or lack thereof contributes to the gaps in income per capita between richer and poorer African countries. Furthermore, our results indicate that the role of governance on economic growth depends on the type and the level of income growth of countries under consideration.

Keywords: Workers’ Remittances; Economic Growth; Panel Data; Arellano-Bond; Quantile Regression; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: E21 F21 G22 J61 O16 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-afr, nep-dev and nep-fdg
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Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:mts:wpaper:201012

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