Analysing governance‐led infrastructural development nexus in sub‐Saharan Africa: Does the moderating role of institutional quality matter?

Abstract

Governments engage in infrastructural developments across the globe, and the level of success often colligates with institutional quality levels. However, despite the presence of governance, the lack of well‐developed infrastructure has bedevilled sub‐Saharan African (SSA) countries for decades. Therefore, this study investigates the governance‐led infrastructural development hypothesis for the SSA region from an institutional quality perspective towards addressing the infrastructural deficit challenges of the region. A combination of advanced panel econometric techniques was applied to data collected from the African Development Bank, World Bank World Development Indicator, and International Monetary Fund (IMF) to investigate the governance‐led infrastructural development hypothesis in SSA while controlling for financial development, economic growth, and industrialization in the region. The findings show that the interaction of institutional quality measures and governance indicators significantly and positively induces infrastructure in sub‐Saharan Africa (SSA). Additionally, while economic growth and financial development yield no expected significant influence on infrastructural developments, industrialization plays a crucial role, as its spillover effects are not confined to boosting economic growth alone but also to infrastructural transformations. Thus, the provision of policy frameworks by authorities to strengthen institutions and promote good governance is vital for articulating and facilitating infrastructural development plans for SSA.

Quality Governance, the Spice for Quality Infrastructure Development in Africa

“…This is amidst a very weak quality governance in the entire continent with the exception of Mauritius and Seychelles and only 7 Wen 2010). Those that actually looked at both quality governance and infrastructure development examined their relationship in the manufacturing sector of Indonesia (Ahmed et al 2023;Appiah et al 2024). Yet this study is looking at the relationship between quality governance and infrastructure development in Africa.…”

“…Whereas, physical infrastructure takes on the tangible infrastructure like the houses, roads, energy generation equipment (Timilsina et al 2024). Additionally, economic infrastructure empowers economic activities like the transport systems' contribution to the trade activities (Appiah et al 2024;Fioravanti et al 2019), while, the social infrastructure anchors the welfare of the society that includes and not limited to schools and hospitals. Lastly yet not least is the civic infrastructure that is mainly called so, because it is developed by the civil society (Tandrayen-Ragoobur et al 2023).…”

“…Quality governance is defined to mean accountability procedures, regulatory compliance, quality standards, governance procedures, guidelines, and practices that control the design, execution, and upkeep of infrastructure projects (Butkus and Seputiene 2018; Mensah and Traore 2024).Where as (Kaufmann, Kraay, and Mastruzzi 2017) define it as effective management and oversight of processes, systems, and institutions to ensure the delivery of high-quality outcomes. It involves the establishment of frameworks, standards, mechanisms that promote transparency, accountability, efficiency in decision-making and resource allocation (Appiah et al 2024;Opoku et al 2024). One of the measures of quality governance adopted for this study is government effectiveness (GE) (Appiah et al 2024).…”

“…It involves the establishment of frameworks, standards, mechanisms that promote transparency, accountability, efficiency in decision-making and resource allocation (Appiah et al 2024;Opoku et al 2024). One of the measures of quality governance adopted for this study is government effectiveness (GE) (Appiah et al 2024). Some scholars argue that private investors are attracted to invest in various infrastructure if there is effective governance.…”