Global Journal of Interdisciplinary Social Sciences

Abstract

Institutional Quality and Development Nexus in Africa Revisited: ARDL Panel Approach

Hammed A. Adefeso* and Isiaka O. Aransi

This study re-examines short and long run links between institutional quality and development in 51 African countries panel from 1972-2020 by estimating Panel Autoregressive Distributive Lag (ARDL) model. The study employs principal component analysis to generate data for political institution, economic institution and legal institution as well as total/overall institution. The study finds evidence of long run relationship between the quality of institutions and development in African countries. Specifically, the study finds insignificant positive relationship between all institution indexes and GDP per capita in the short run with exception of economic institution, which has negative impact. In the long run however, all institution indexes have significant negative relationship development except legal institution, which has insignificant impact. Estimate from overall institution reveals positive and negative relationships in the short run and long run respectively and generally insignificant in Africa. The study recommends that African leaders should improve and ensure strong institution for development.

Published Date: 2022-09-07; Received Date: 2022-07-01