EconPapers    
Economics at your fingertips  
 

The institution-growth nexus in Sub-Saharan Africa: new evidence from heterogeneous panel causality approach

Mohammed Hussen and Murat Çokgezen ()
Additional contact information
Murat Çokgezen: Marmara University

Evolutionary and Institutional Economics Review, 2022, vol. 19, issue 1, No 6, 157 pages

Abstract: Abstract Whether economic growth is the cause or the consequence of improved institutional quality has been a controversial issue. To throw light on this debate, the present study aims to investigate the nature and direction of causality between institutional quality and economic growth. To this end, a panel data of 30 SSA countries for the 1990–2015 period is used and analyzed using a heterogeneous panel non-causality approach developed by Dumitrescu and Hurlin (Econ Model 29(4):1450–1460, 2012). Our empirical findings indicate a significant heterogeneity across the countries with regard to the relationship between growth and institutional quality, based on the income level. In low-income countries, we found a unidirectional causality that runs from institutional quality to growth. For lower-middle-income countries, however, the direction of causality is reversed. The evidence from this study also suggests a bidirectional causality in upper-middle-income countries. The policy implication of these findings is that policymakers in low-income countries should focus on institutional reform. Good quality institutions will promote economic growth that will ultimately turn into a cyclical process between economic growth and institutional development in later stages.

Keywords: Institutional quality; Economic growth; SSA; Heterogonous panel causality (search for similar items in EconPapers)
JEL-codes: C33 O43 O55 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s40844-021-00225-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:eaiere:v:19:y:2022:i:1:d:10.1007_s40844-021-00225-1

Ordering information: This journal article can be ordered from
https://www.springer ... theory/journal/40844

DOI: 10.1007/s40844-021-00225-1

Access Statistics for this article

Evolutionary and Institutional Economics Review is currently edited by Kiichiro Yagi, Yuji Aruka and Takahiro Fujimoto

More articles in Evolutionary and Institutional Economics Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2023-11-13
Handle: RePEc:spr:eaiere:v:19:y:2022:i:1:d:10.1007_s40844-021-00225-1