Premium
Growth and Institutions: A Potential Medicine for the Poor in Sub‐Saharan Africa
Author(s) -
Akobeng Eric
Publication year - 2016
Publication title -
african development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.654
H-Index - 32
eISSN - 1467-8268
pISSN - 1017-6772
DOI - 10.1111/1467-8268.12163
Subject(s) - poverty , economics , per capita , development economics , panel data , government (linguistics) , poverty reduction , agriculture , generalized method of moments , bureaucracy , inclusive growth , per capita income , economic growth , econometrics , political science , geography , population , linguistics , philosophy , demography , archaeology , sociology , politics , law
The conventional wisdom is that growth is a precondition for poverty reduction. Paying particular attention to the level of growth, poverty and institutions in sub‐Saharan Africa (SSA), this paper investigates the effect of GDP per capita growth and sectoral growth on poverty and explores whether the growth‐poverty link can be strengthened by institutions. Using the panel dataset of 41 SSA countries over the period 1981–2010 and dynamic two‐step system generalized method of moment (GMM) estimator; it is found that GDP per capita growth is an important instrument for poverty reduction. Also, the growth of agriculture and the service sectors have direct poverty‐reducing effects. The paper further reveals that good and accountable government, bureaucratic quality and sound policies and regulations are important ingredients in sustaining the growth‐poverty link in SSA.