Governance and economic growth in Africa: evidence from linear, nonlinear and dynamic panel analysis

Giannis Karagiannis () and Suzanna-Maria Paleologou ()
Additional contact information
Giannis Karagiannis: University of Macedonia
Suzanna-Maria Paleologou: Aristotle University of Thessaloniki

Empirical Economics, 2025, vol. 69, issue 1, No 2, 39-75

Abstract: Abstract In this paper, we study the impact (if any) of governance quality on economic growth in Africa, using a panel dataset of fifty countries during the period 2008–2017. For this purpose, we use the Ibrahim Index of African Governance (IIAG), which consists of four component indicators related to the (i) safety and rule of law, (ii) participation rights and inclusion, (iii) sustainable economic opportunity and (iv) human development. Instead of simply using its original formulation, which is based on equal weights, we also construct weighted average variants of the IIAG using four distance-based methods and Shannon entropy for such purpose. We then use these variants of the IIAG, including the equal weights formulation, to estimate alternative specifications of an econometric model relating governance quality and economic growth, conditional on several control variables, using fixed effects, linear and nonlinear and dynamic GMM. The results from the linear and dynamic GMM show that, regardless of the aggregation weights used for the IIAG, governance seems to have a significant positive impact on economic growth. On the other hand, in the fixed effects model, we find evidence for a non-monotonic relation, taking a U-shaped (convex) form indicating that countries may benefit from misgovernance.

Keywords: Africa; Economic growth; Governance; Panel data models (search for similar items in EconPapers)
JEL-codes: C23 F43 O16 O43 O55 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00181-025-02726-z 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:empeco:v:69:y:2025:i:1:d:10.1007_s00181-025-02726-z

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-025-02726-z

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

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