INSTITUTIONAL QUALITY INDICATORS AND ECONOMIC GROWTH IN SELECTED SUB-SAHARAN AFRICAN COUNTRIES

Abstract

This paper examined institutional factors and economic growth in selected Sub-Saharan African countries. The study employed the corruption perception, government effectiveness, regulatory quality, voice and accountability, political stability and rule of law as institutional quality indicators as provided by the World Governance Indicators, WGI (2019). A panel data set of 16 selected Sub-Saharan African countries from 2005 to 2019 was estimated using the Pooled Ordinary Least Square (POLS), Panel Fixed effect (FE), and the panel two-stage least square technique. The result showed that institutional quality indicators as corruption perception, political stability and rule of law aggravates economic growth both in the fixed effect and the panel two-stage least square technique. Similarly, financial deepening tends to contribute to economic growth in SSA. The study concludes that an effectively institutional quality will stimulate economic activities leading to an overall growth in the economy.