INSTITUTIONAL QUALITY AND ECONOMIC GROWTH IN TANZANIA

Vincent Gibogwe, Ayine Nigo and Karen Kufuor

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we use the ARDL method to find the Impact of institutional quality on economic growth in Tanzania from 1990 to 2021. The ARDL technique frees variables from residual correlation as all variables are assumed to be endogenous. They distinguish between dependent and explanatory variables in any long-run relationship, identify the co-integrating vectors with multiple co-integrating vectors, and derive the Error Correction Model (ECM) or Error Correction Model (ECM) Vector Error Correction Model (VECM) by integrating short-run adjustments with long-run equilibrium without losing extended-run information. Our results show all adjustment terms in the respective models that have a long-run relationship have correct (negative) signs and are more than one, implying there is convergence in the long run; that is, the models returned to their long-run equilibrium; the rate (or speed) at which this happened ranged between 15% to 106.6% annually. Institutional quality has a significant affirmative (0.047) causal long-run effect on economic growth.

Keywords: institutional quality; economic growth; the rule of law; market liberalization (search for similar items in EconPapers)
JEL-codes: F63 O19 O47 O55 (search for similar items in EconPapers)
Date: 2022-11-17
New Economics Papers: this item is included in nep-afr and nep-gro
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