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The quality of institutions and economic growth in Africa?: An empirical analysis of the relationship between quality of institutions and economic growth in Africa
Södertörn University, School of Social Sciences.
Södertörn University, School of Social Sciences.
2019 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Africa is one of the richest continents on the planet in terms of natural resources, but has the highest poverty rate, fastest growing population and includes many of the world ́s most corrupt countries.

There is an ongoing discussion if the quality of institutions affects economic growth, and the applicability of economic institutional theory to the African continent. North and Thomas (1973) argues that indicators such as education innovation, capital accumulation, etc. are not causes of growth itself but rather the growth itself. Instead they suggest that economic institutions are the fundamental reason behind economic growth, since they allow new ideas, and firms and stakeholders to exist in the market. Our research question therefore examines if the quality of institutions can explain the rate of economic growth in Africa?

In this study we used a panel data analysis based on 12 variables including, GDP per capita growth, Rule of Law, Control of corruption, Voice and Accountability, Government Effectiveness, Regulatory Quality, Political Stability and Absence of Violence/Terrorism, Education, Population, Foreign Direct Investment, Gross Capital Formation as well as initial GDP, between year 2003-2017, to examine the relationship between economic performance and institutional quality in 50 African countries. Our results showed that six out of our six institutional variables had a positive significant effect on economic growth. This supports the theory that institutional quality impacts economic growth.

Place, publisher, year, edition, pages
2019. , p. 34
Keywords [en]
Institutional Quality, Economic Growth, Panel Data Analysis, Africa
National Category
Social Sciences Economics
Identifiers
URN: urn:nbn:se:sh:diva-38873OAI: oai:DiVA.org:sh-38873DiVA, id: diva2:1348149
Subject / course
Economics
Uppsok
Social and Behavioural Science, Law
Supervisors
Available from: 2019-09-03 Created: 2019-09-03 Last updated: 2019-09-03Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • harvard-anglia-ruskin-university
  • apa-old-doi-prefix.csl
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf