Government size, institutional quality and economic welfare in Africa
Mark Kunawotor,
Godson Ahiabor and
Eric Yobo
International Journal of Social Economics, 2024, vol. 52, issue 4, 578-590
Abstract:
Purpose - Most African countries operate large government sizes but with little corresponding economic outcomes. Institutional economics however, show that strong institution is fundamental in promoting economic growth. This study examines the linkages between government size, institutional quality and economic welfare in Africa. Design/methodology/approach - This study deploys the System Generalized Method of Moments estimation strategy on panel data of 52 African economies from 2000–2018. Findings - The result shows that government size has a negative impact on economic welfare, while institutional quality has a positive impact on economic welfare. The interaction of government size and institutional quality shows a positive impact on economic welfare, signifying synergy and complementarity. Thus, strong institutions counteract the adverse effects of large government size on economic welfare. Practical implications - To promote human development and economic welfare, and attain key Sustainable Development Goals such as good health and well-being, quality education, decent work and economic growth, African policy makers need to keep their government sizes at optimal levels and promote strong institutions. Originality/value - This paper provides first-hand empirical evidence of the relevance of institutional quality in counteracting the adverse influence of large government size in Africa. It determines the thresholds of government size and uses a composite index as proxy for same. In addition, this study uses the World Governance Indicators and the Fraser Institute Economic Freedom Index as alternative measures of institutional quality and Gross Domestic Product per capita and Human Development Index as proxies for economic welfare. Peer review - The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-01-2024-0075
Keywords: Institutional quality; Economic welfare; Government size (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:ijse-01-2024-0075
DOI: 10.1108/IJSE-01-2024-0075
Access Statistics for this article
International Journal of Social Economics is currently edited by Professor Terence Garrett
More articles in International Journal of Social Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().