Insurance Development and Economic Growth in Sub-Saharan Africa: Does Institutional Quality Matter?

Akinlo Anthony Enisan () and Akinlo Taiwo
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Akinlo Anthony Enisan: Obafemi Awolowo University
Akinlo Taiwo: Adeyemi College of Education, Nigeria

Journal of Economic Development, 2024, vol. 49, issue 4, 71-98

Abstract: This paper investigates how institutional environments shape the relation between insurance development and economic growth nexus in a panel of 39 sub-Saharan African countries from 1991 to 2018 using the two-step system Generalised Method of Moment (GMM) estimation technique. The results show that total insurance, life insurance, and non-life insurance positively impacted economic growth. While the political environment and the rule of law enhance economic growth, economic freedom, and legal and property rights hurt it. Finally, the interaction of insurance and institutional quality variables is associated with lower growth. These results not only support North’s (1990) argument that institutions play a critical role in nations’ economic growth but corroborate the hypothesis that unhealthy political institutions could deter the growth-effect of insurance. The findings from this study underlie the importance of strengthening the institutional factors to enhance insurance development’s impact on economic growth in Africa.

Keywords: Insurance Development; Economic Growth; Institutional Quality; Panel Data (search for similar items in EconPapers)
JEL-codes: C23 G22 O40 O43 (search for similar items in EconPapers)
Date: 2024
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