Public debt, institutional quality and growth in sub-Saharan Africa: a threshold analysis

Kemoe, Laurent

doi:10.1080/02692171.2021.1957785

Cited by 14 publications

(9 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…While Glaeser et al (2004) support that the institutions do not directly affect economic growth and the effects depend on corruption, Bonnal and Yaya (2015) document that institutional quality does not affect economic growth. Our findings are also in line with Kemoe and Lartey (2021) and Wandeda et al (2021) who underline that the effect of institutional quality on output varies in Sub-Saharan African countries with less effectiveness in Eastern and Central Africa. As a policy recommendation, decision-makers should strengthen institutions through anti-corruption measures, government bureaucracies' removal, and citizen involvement in the development agenda to increase transparency.…”

Section: Resultssupporting

confidence: 93%

Financial development, ecological transition, and economic growth in Sub-Saharan African countries: the performing role of the quality of institutions and human capital

Tinta

2022

Environ Sci Pollut Res

View full text Add to dashboard Cite

Even though the ecological transition is considered the next big challenge for Africa, few studies have examined its scope regardless of the massive financing that is required and the stakes on other sectors. This study analyzes the links between financial development, ecological transition, and economic growth in Sub-Saharan Africa from 1980 to 2019. The Dumitrescu and Hurlin causality tests, Pedroni and Westerlund cointegration, and the Augmented Mean Group algorithm are applied on a sample of forty-eight countries. The findings support that institutional quality and human capital are crucial, but their effects can only be observed in high-income and upper middle-income countries. The level of economic development matters, and there is a threshold beyond which the effects of renewable energies and human capital occur on the performance of the financial system. Trade openness and investments seem also to be positive and significant on ecological transition only in these countries. Furthermore, there is substitutability between non-renewable and renewable energy consumption in these countries, while in lower middle-income and low-income countries, there is complementarity. The study concludes by highlighting key policy recommendations to sustain ecological transition.

show abstract

Section: Resultssupporting

confidence: 93%

Financial development, ecological transition, and economic growth in Sub-Saharan African countries: the performing role of the quality of institutions and human capital

Tinta

2022

Environ Sci Pollut Res

View full text Add to dashboard Cite

show abstract

“…In the existing literature, public debt reduces economic growth by causing a decrease in savings and capital accumulation. Endogenous growth models point to a similar conclusion (Greiner, 2012).…”

Section: Introductionmentioning

confidence: 60%

“…In these countries, borrowing is important for the sustainability of the economy. However, besides its positive effects, it is emphasized that high public debt increases economic growth in underdeveloped and developing countries only to a certain extent (Griffin & Enos, 1970). The question of the limit of borrowing is also controversial.…”

Section: Introductionmentioning

confidence: 99%

The Relationship Between Fiscal Performance, Governance Quality, and Economic Growth: Evidence From Sub-Saharan Countries

Çetenak

2022

Afro Eurasian Studies

View full text Add to dashboard Cite

Many studies in recent years have focused on the relationship between the government's ability to manage and economic performance indicators. There is ample empirical evidence that factors such as the presence of corruption, violence, and terrorism in a country, and the quality of institutions controlling the market affect the success of economic policies. Similarly, the issue of how the public debt stock affects economic growth has been the central question of many studies. Especially in recent years, the violence, terrorism, and separatist wars that have emerged in Africa have led to the intensification of studies on the continent. In addition, there are many studies supporting that the climate of insecurity created by the violence and terrorist incidents in the continent is the cause of the failure of governance in Africa. Governance failure is also an indicator of ineffectiveness in the formulation and implementation of public policies. This study focuses on investigating the effects of fiscal performance and governance quality on economic growth in Sub-Saharan African countries. In the study, data from 25 sub-Saharan African countries for the period 2002-2019 were used. According to the results of the analysis, as public expenditures increase in the mentioned countries, economic growth decreases. In terms of the focus of the study, it has been found that as fiscal performance and governance quality increase, economic growth also increases. As a fiscal performance indicator, the arithmetic average of the public's domestic and external debt stock was calculated and included in the analysis. An increase in the fiscal performance value means an increase in the country's debt stock.

show abstract

“…Also, the findings indicated that poor institutions have a considerable indirect consequence on reducing the GDP growth rate. Kemoe and Lartey (2022) concluded that the deleterious consequence of debt on growth is dampened by the better institutional performance in a sample of African economies.…”

Section: Literature Reviewmentioning

confidence: 99%

How does institutional quality moderates the impact of public debt on economic growth? Startling evidence from OIC countries

Aurangzaib

Farooq

2022

IJMRES

View full text Add to dashboard Cite

Utilizing the data for forty-three member countries of the Organization of Islamic Cooperation (OIC), this study delves into the impact of public debt on economic growth and evaluates how institutional quality moderates this effect. The outcomes of the study disclose a nonlinear relationship between public debt and economic growth in OIC countries. The results disclose threshold value of public debt is 63.43 as a percent of GDP in OIC economies after this it thwarts economic growth. The quantitative outcomes unveil that the quality of political and economic institutions boosts economic growth. The findings from the various models demonstrate that political institutions influence the growth impact of the economic institutions, these findings are acknowledging the "hierarchy of institutions hypothesis." The results of the interaction term reveal that, even as public debt hurts economic growth, better political and economic institutional quality measures alleviate this negative impact. Institutional infrastructure reforms are critical for public debt accumulation policy to mitigate the undesirable consequence of debt on economic growth in OIC member countries. Countries should considerably lessen their dependence on public debt and keep it below the threshold level that harms economic growth. OIC countries should mobilize their internally produced revenue collection mechanisms in order to increase revenue generation and close the gap between available resources and spending while incurring the least amount of public debt. Our findings can be pragmatic to design a germane fiscal policy to maximize economic growth.

show abstract

Public debt, institutional quality and growth in sub-Saharan Africa: a threshold analysis

Cited by 14 publications

References 32 publications

Financial development, ecological transition, and economic growth in Sub-Saharan African countries: the performing role of the quality of institutions and human capital

Financial development, ecological transition, and economic growth in Sub-Saharan African countries: the performing role of the quality of institutions and human capital

The Relationship Between Fiscal Performance, Governance Quality, and Economic Growth: Evidence From Sub-Saharan Countries

How does institutional quality moderates the impact of public debt on economic growth? Startling evidence from OIC countries

Contact Info

Product

Resources

About