Growth and Institutions: A Potential Medicine for the Poor in Sub-Saharan Africa

Eric Akobeng ()

African Development Review, 2016, vol. 28, issue 1, 1-17

Abstract: type="main" xml:lang="en">

The conventional wisdom is that growth is a precondition for poverty reduction. Paying particular attention to the level of growth, poverty and institutions in sub-Saharan Africa (SSA), this paper investigates the effect of GDP per capita growth and sectoral growth on poverty and explores whether the growth-poverty link can be strengthened by institutions. Using the panel dataset of 41 SSA countries over the period 1981–2010 and dynamic two-step system generalized method of moment (GMM) estimator; it is found that GDP per capita growth is an important instrument for poverty reduction. Also, the growth of agriculture and the service sectors have direct poverty-reducing effects. The paper further reveals that good and accountable government, bureaucratic quality and sound policies and regulations are important ingredients in sustaining the growth-poverty link in SSA.

Date: 2016
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